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Connections Between Foreign Direct Investments And Research-Developmentinnovation Activity

Author

Listed:
  • MILEA, Camelia

    („Victor Slăvescu” Centre for Financial and Monetary Research, Romanian Academy)

Abstract

Foreign direct investments represent one of the ways of financing any economy. But as any funding source, it has advantages and disadvantages for the host country. In this article, I begin by clarifying the concepts of direct foreign investments and research, development and innovation. Then, I intend to present, based on the analysis and synthesis of the economic literature, the positive and negative effects of foreign direct investments on the activity of research - development - innovation, highlighting, based on interpretations, the correlations among them. The analysis shows that the relationship between foreign direct investments and the research development - innovation activity is complex and bidirectional. Another ideas developed in the article consist in the assessment of Romania's position regarding the research - development – innovation activity and in the presentation of the measures taken in Romania in order to reach the targets of the Europe 2020 strategy. Noting modest results in terms of research intensity in Romania, I suggest some measures aimed at stimulating research, development and innovation in our country.

Suggested Citation

  • MILEA, Camelia, 2015. "Connections Between Foreign Direct Investments And Research-Developmentinnovation Activity," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 19(1), pages 102-120.
    • Handle: RePEc:vls:finstu:v:19:y:2015:i:1:p:102-120
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    References listed on IDEAS

    as
    1. Bertschek, I., 1995. "How to Stay in The Market? - Products and Process Innovation as a Response to Increasing Imports and Foreign Direct Investment," SFB 373 Discussion Papers 1995,7, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    2. Priit Vahter, 2010. "Does FDI spur innovation, productivity and knowledge sourcing by incumbent firms? Evidence from manufacturing industry in Estonia," Discussion Papers 10/09, University of Nottingham, GEP.
    3. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    4. Bertschek, Irene, 1995. "Product and Process Innovation as a Response to Increasing Import and Foreign Direct Investment," Journal of Industrial Economics, Wiley Blackwell, vol. 43(4), pages 341-357, December.
    5. Lall, Sanjaya, 1983. "Determinants of R&D in an LDC : The Indian engineering industry," Economics Letters, Elsevier, vol. 13(4), pages 379-383.
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    7. Mowery, David & Rosenberg, Nathan, 1993. "The influence of market demand upon innovation: A critical review of some recent empirical studies," Research Policy, Elsevier, vol. 22(2), pages 107-108, April.
    8. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(4), pages 483-498, Winter.
    9. Girma, Sourafel & Gong, Yundan & Görg, Holger, 2009. "What Determines Innovation Activity in Chinese State-owned Enterprises? The Role of Foreign Direct Investment," World Development, Elsevier, vol. 37(4), pages 866-873, April.
    10. Stiebale, Joel & Reize, Frank, 2008. "The Impact of FDI on Innovation in Target Firms," Ruhr Economic Papers 50, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
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    Cited by:

    1. Arun, Korhan & Yıldırım, Durmuş Çağrı, 2017. "Effects of Foreign Direct Investment on Intellectual Property, Patents and R&D," MPRA Paper 80470, University Library of Munich, Germany.

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    More about this item

    Keywords

    foreign investors; technology; competitiveness; economic development; interdependences; effects;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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