IDEAS home Printed from https://ideas.repec.org/a/bla/econom/v64y1997i253p63-79.html
   My bibliography  Save this article

Innovation, Foreign Direct Investment and Growth

Author

Listed:
  • Uwe Walz

Abstract

Direct foreign investment is incorporated in a dynamic general equilibrium model with endogenous technological change. In contrast to recent endogenous growth approaches, I allow for geographical separation of the innovation and production of newly developed goods. Firms acquire specific knowledge through R&D investment in the more developed country and use their specific asset to establish a production plant in the low‐cost country. Foreign direct investment is accompanied by interregional spillovers of knowledge from the more to the less advanced country. I derive a steady‐state equilibrium with active innovation and production activities in the high‐technology sector in both countries. Furthermore, the implications of factor flow liberalization as well as of industrial policies are investigated.

Suggested Citation

  • Uwe Walz, 1997. "Innovation, Foreign Direct Investment and Growth," Economica, London School of Economics and Political Science, vol. 64(253), pages 63-79, February.
    • Handle: RePEc:bla:econom:v:64:y:1997:i:253:p:63-79
    DOI: 10.1111/1468-0335.00064
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1468-0335.00064
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1468-0335.00064?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Todo Yasuyuki, 2005. "Technology Adoption in Follower Countries: With or Without Local R&D Activities?," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-32, February.
    2. Shujie Yao & Fan Zhang & Pan Wang & Dan Luo, 2017. "Location Determinants of China's Outward Foreign Direct Investment," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 25(6), pages 1-27, November.
    3. Kottaridi, Constantina & Stengos, Thanasis, 2010. "Foreign direct investment, human capital and non-linearities in economic growth," Journal of Macroeconomics, Elsevier, vol. 32(3), pages 858-871, September.
    4. Uwe Walz, 1997. "Dynamic Effects of Economic Integration: A Survey," Open Economies Review, Springer, vol. 8(3), pages 309-326, July.
    5. Muhammad Arshad Khan, 2007. "Foreign Direct Investment and Economic Growth: The Role of Domestic Financial Sector," PIDE-Working Papers 2007:18, Pakistan Institute of Development Economics.
    6. Xiaoxu Dong & Cheon Yu & Yun Seop Hwang, 2021. "The Effects of Reverse Knowledge Spillover on China’s Sustainable Development: Sustainable Development Indicators Based on Institutional Quality," Sustainability, MDPI, vol. 13(4), pages 1-17, February.
    7. Chih‐Hai Yang & Yi‐Yin Wu & Hui‐Lin Lin, 2010. "Outward Investment To China And Local Innovation Of Taiwanese Manufacturing Firms," The Japanese Economic Review, Japanese Economic Association, vol. 61(4), pages 538-557, December.
    8. Liu, Xiaming & Parker, David & Vaidya, Kirit & Wei, Yingqi, 2001. "The impact of foreign direct investment on labour productivity in the Chinese electronics industry," International Business Review, Elsevier, vol. 10(4), pages 421-439, August.
    9. Ping Ji & Weidong Huo & Lan Bo & Weiwei Zhang & Xiaoxian Chen, 2022. "Would Financial Development Help China Achieve Carbon Peak Emissions?," IJERPH, MDPI, vol. 19(19), pages 1-19, October.
    10. Jen‐Chung Mei, 2023. "Foreign direct investment and relative capacity: Theory and evidence," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(4), pages 1175-1214, October.
    11. Barreto, Tais S. & Lanivich, Stephen E. & Cox, Kevin C., 2022. "Temporal orientation as a robust predictor of innovation," Journal of Business Research, Elsevier, vol. 138(C), pages 287-300.
    12. Parneet Kaur & Guntas Punia Nakai & Navneet Kaur, 2022. "Spatial Spillover of Product Innovation in the Manufacturing Sector: Evidence from India," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(1), pages 447-473, March.
    13. Wentian Shi & Debin Du & Wenlong Yang, 2019. "The Flow Network of Chinese Scientists and Its Driving Mechanisms Based on the Spatial Development Path of CAS and CAE Academicians," Sustainability, MDPI, vol. 11(21), pages 1-22, October.
    14. Johnson, Andreas, 2006. "The Effects of FDI Inflows on Host Country Economic Growth," Working Paper Series in Economics and Institutions of Innovation 58, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    15. Feng, Wei & Sun, Shujun & Yuan, Hang, 2023. "Research on the efficiency of factor allocation in the pilot free trade zones," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 727-745.
    16. Arshed, Noman & Hanif, Nadia & Aziz, Osama & Croteau, Martin, 2022. "Exploring the potential of institutional quality in determining technological innovation," Technology in Society, Elsevier, vol. 68(C).
    17. Jocelyn Glass, Amy & Saggi, Kamal, 2002. "Licensing versus direct investment: implications for economic growth," Journal of International Economics, Elsevier, vol. 56(1), pages 131-153, January.
    18. Mebratu Seyoum & Renshui Wu & Jihong Lin, 2015. "Foreign Direct Investment and Economic Growth: The Case of Developing African Economies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 122(1), pages 45-64, May.
    19. Amy Glass & Kamal Saggi, 1999. "The Dynamic Impact of Internalization Advantage," Working Papers 99-04, Ohio State University, Department of Economics.
    20. VPhuong V. Nguyen, Khoa T. Tran, Nga Thuy Thanh Le and Hoa Doan Xuan Trieu, 2020. "Examining FDI Spillover Effects on Productivity Growth: Firm-Level Evidence from Vietnam," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 45(1), pages 97-121, March.
    21. Huilin Lin & Ryh-Song Yeh, 2005. "The interdependence between FDI and R&D: an application of an endogenous switching model to Taiwan's electronics industry," Applied Economics, Taylor & Francis Journals, vol. 37(15), pages 1789-1799.
    22. Alvina Sabah Idrees & Saima Sarwar, 2021. "State effectiveness, property rights and entrepreneurial behaviour as determinants of National Innovation," Australian Economic Papers, Wiley Blackwell, vol. 60(3), pages 392-423, September.
    23. Manzoor Ahmad & Jianghuai Zheng, 2023. "The Cyclical and Nonlinear Impact of R&D and Innovation Activities on Economic Growth in OECD Economies: a New Perspective," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(1), pages 544-593, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:econom:v:64:y:1997:i:253:p:63-79. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.