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Determinants and Effects of Foreign Direct Investment in Austria: Spillovers to Novel Innovative Environmental Technologies

Author

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  • Mahdi Ghodsi
  • Branimir Jovanovic

Abstract

This study investigates the determinants of FDI in Austria, as well as their spillovers to inno-vating technologies, productivity, and employment, using firm-level data, for the period 2008-2018. The findings point out that a decrease in the costs of trade increases investment in foreign-owned subsidiaries in Austria, and that FDI is pre-dominantly carried out in indus-tries characterised by greater capital-intensity, higher wages, more agglomeration and regional concentration. Furthermore, FDI is higher in regions with a larger GDP and with a larger share of the population with upper secondary and post-secondary nontertiary edu-cation. The study also finds that there are positive spillovers of FDI to the domestic econo-my, which are strongest and most positive for innovative activities in environmental tech-nologies. In other words, FDI helps Austrian firms to become more innovative in major envi-ronmental technologies. Such innovative efforts are best supported at the firm-level by supporting the total assets and investment of domestic firms, and at the regional level by increasing the share of the population with higher levels of education and employing more R&D personnel. The active presence of innovative foreign MNEs that enjoy extensive technological capacities, high-skilled labour, experienced management, and large-scale resources are also conducive to innovative activities.

Suggested Citation

  • Mahdi Ghodsi & Branimir Jovanovic, 2022. "Determinants and Effects of Foreign Direct Investment in Austria: Spillovers to Novel Innovative Environmental Technologies," FIW Research Reports series VIII-001, FIW.
  • Handle: RePEc:wsr:ecbook:y:2022:m:06:i:viii-001
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    Citations

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    Cited by:

    1. Andrzej Cieslik & Mahdi Ghodsi, 2023. "The Impact of Regulatory Divergence in NTM on the Cross-Border Investment of Multinationals," Working Papers DP-2023-21, Economic Research Institute for ASEAN and East Asia (ERIA).

    More about this item

    Keywords

    FDI; Austria; innovation; spillovers; environmental technologies;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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