What Fosters Innovation? A CrossSectional Panel Approach to Assessing the Impact of Cross Border Investment and Globalization on Patenting Across Global Economies
Abstract
This study considers the impact of foreign direct investment (FDI) on innovation in
high income, uppermiddle income and lowermiddle income countries. Innovation matters
because it is a critical factor for economic growth. In a panel setting, this study
assesses the degree to which FDI functions as a vehicle for innovation as proxied
by scaled local resident patent applications. This study considers research and development
(R&D), domestic savings, imports and exports, and quality of governance as factors
which could also impact the effectiveness of FDI on innovation. Our results suggest
FDI is most effective as inward direct investment in countries outside the technological
frontier possessing adequate existing domestic investment capital and R&D spending
to convert foreign investment capital and technological spillover into innovation.
Nonetheless, FDI was not a consistent indicator for innovation; rather, the most consistent
indicators across this study were R&D and domestic savings. Differences amongst income
groups are highlighted as well as their varying responses to our array of causal factors.
Type
Honors thesisDepartment
EconomicsSubject
Foreign Direct Investment (FDI)Innovation
Patents
Patent Applications
Institutions
Research and Development (R&D)
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https://hdl.handle.net/10161/16741Citation
Dessau, Michael; & Vega, Nicholas (2018). What Fosters Innovation? A CrossSectional Panel Approach to Assessing the Impact
of Cross Border Investment and Globalization on Patenting Across Global Economies.
Honors thesis, Duke University. Retrieved from https://hdl.handle.net/10161/16741.Collections
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