IDEAS home Printed from https://ideas.repec.org/a/fep/journl/v28y2017i1p34-49.html
   My bibliography  Save this article

Knowledge Spillovers, the Technology Frontier and High-Tech FDI - Evidence from Finland

Author

Listed:
  • Elina Berghäll

    (VATT Institute for Economic Research)

Abstract

The link between foreign direct investment (FDI) and the technology frontier is strong in the theoretical and empirical literature, particularly for high-tech multinational corporations. Policymakers aiming to harness local high-tech clusters therefore tend to cherish high-tech inward FDI. It is not clear whether they should. With an unbalanced panel of Finnish ICT manufacturing firms for 1993–2003, I identify the direction of knowledge spillovers by comparing the technical efficiencies of foreign and indigenous firms with DEA and order-m methodology. When knowledge spillovers flow predominantly to foreign firms, innovation policy seeking to accelerate them may accelerate the net loss of strategic assets.

Suggested Citation

  • Elina Berghäll, 2017. "Knowledge Spillovers, the Technology Frontier and High-Tech FDI - Evidence from Finland," Finnish Economic Papers, Finnish Economic Association, vol. 28(1), pages 34-49, Autumn.
    • Handle: RePEc:fep:journl:v:28:y:2017:i:1:p:34-49
    as

    Download full text from publisher

    File URL: http://www.taloustieteellinenyhdistys.fi/wp-content/uploads/2017/10/V2_FEP_berghall.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. van Beers, Cees & Berghäll, Elina & Poot, Tom, 2008. "R&D internationalization, R&D collaboration and public knowledge institutions in small economies: Evidence from Finland and the Netherlands," Research Policy, Elsevier, vol. 37(2), pages 294-308, March.
    2. Brian J. Aitken & Ann E. Harrison, 2022. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 6, pages 139-152, World Scientific Publishing Co. Pte. Ltd..
    3. John Van Reenen & Rupert Harrison & Rachel Griffith, 2006. "How Special Is the Special Relationship? Using the Impact of U.S. R&D Spillovers on U.K. Firms as a Test of Technology Sourcing," American Economic Review, American Economic Association, vol. 96(5), pages 1859-1875, December.
    4. Griffith, Rachel & Redding, Stephen & Simpson, Helen, 2002. "Productivity Convergence and Foreign Ownership at the Establishment Level," CEPR Discussion Papers 3765, C.E.P.R. Discussion Papers.
    5. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
    6. James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-189, Spring.
    7. Klette, Tor Jakob & Moen, Jarle & Griliches, Zvi, 2000. "Do subsidies to commercial R&D reduce market failures? Microeconometric evaluation studies1," Research Policy, Elsevier, vol. 29(4-5), pages 471-495, April.
    8. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    9. Hildegunn Kyvik Nordås & Sébastien Miroudot & Przemyslaw Kowalski, 2006. "Dynamic Gains from Trade," OECD Trade Policy Papers 43, OECD Publishing.
    10. Lilach Nachum & Srilata Zaheer, 2005. "The persistence of distance? The impact of technology on MNE motivations for foreign investment," Strategic Management Journal, Wiley Blackwell, vol. 26(8), pages 747-767, August.
    11. Dan Andrews & Chiara Criscuolo & Peter N. Gal, 2015. "Frontier Firms, Technology Diffusion and Public Policy: Micro Evidence from OECD Countries," OECD Productivity Working Papers 2, OECD Publishing.
    12. Yun Zhang & Robert Bartels, 1998. "The Effect of Sample Size on the Mean Efficiency in DEA with an Application to Electricity Distribution in Australia, Sweden and New Zealand," Journal of Productivity Analysis, Springer, vol. 9(3), pages 187-204, March.
    13. Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January.
    14. Kjetil Bjorvatn & Carsten Eckel, 2006. "Technology Sourcing and Strategic Foreign Direct Investment," Review of International Economics, Wiley Blackwell, vol. 14(4), pages 600-614, September.
    15. Nicholas Bloom & Christos Genakos & Raffaella Sadun & John Van Reenen, 2011. "Management Practices Across Firms and Countries," CEP Discussion Papers dp1109, Centre for Economic Performance, LSE.
    16. Coad, Alex & Rao, Rekha, 2008. "Innovation and firm growth in high-tech sectors: A quantile regression approach," Research Policy, Elsevier, vol. 37(4), pages 633-648, May.
    17. Klara Sabirianova & Jan Svejnar & Katherine Terrell, 2005. "Distance to the Efficiency Frontier and Foreign Direct Investment Spillovers," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 576-586, 04/05.
    18. Pii Elina Berghäll, 2012. "R&D vs. Other Factor Inputs in a High-Tech Industry," Industry and Innovation, Taylor & Francis Journals, vol. 19(2), pages 127-153, February.
    19. George Battese & D. Rao & Christopher O'Donnell, 2004. "A Metafrontier Production Function for Estimation of Technical Efficiencies and Technology Gaps for Firms Operating Under Different Technologies," Journal of Productivity Analysis, Springer, vol. 21(1), pages 91-103, January.
    20. Inklaar, Robert & Timmer, Marcel P., 2008. "GGDC Productivity Level Database: International Comparisons of Output, Inputs and Productivity at the Industry Level," GGDC Research Memorandum GD-104, Groningen Growth and Development Centre, University of Groningen.
    21. Helpman, Elhanan, 1984. "A Simple Theory of International Trade with Multinational Corporations," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 451-471, June.
    22. Francesco Caselli & Wilbur John Coleman II, 2006. "The World Technology Frontier," American Economic Review, American Economic Association, vol. 96(3), pages 499-522, June.
    23. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    24. Alessandro Saia & Dan Andrews & Silvia Albrizio, 2015. "Productivity Spillovers from the Global Frontier and Public Policy: Industry-Level Evidence," OECD Economics Department Working Papers 1238, OECD Publishing.
    25. repec:dgr:rugggd:gd-104 is not listed on IDEAS
    26. Bernstein, Jeffrey I. & Mamuneas, Theofanis P., 2006. "R&D depreciation, stocks, user costs and productivity growth for US R&D intensive industries," Structural Change and Economic Dynamics, Elsevier, vol. 17(1), pages 70-98, January.
    27. Dyson, R. G. & Allen, R. & Camanho, A. S. & Podinovski, V. V. & Sarrico, C. S. & Shale, E. A., 2001. "Pitfalls and protocols in DEA," European Journal of Operational Research, Elsevier, vol. 132(2), pages 245-259, July.
    28. Cazals, Catherine & Florens, Jean-Pierre & Simar, Leopold, 2002. "Nonparametric frontier estimation: a robust approach," Journal of Econometrics, Elsevier, vol. 106(1), pages 1-25, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paola Azar & Gabriela Sicilia, 2021. "An assessment of pupil and school performance in public primary education in Uruguay," Documentos de Trabajo (working papers) 21-22, Instituto de Economía - IECON.
    2. Emrouznejad, Ali & De Witte, Kristof, 2010. "COOPER-framework: A unified process for non-parametric projects," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1573-1586, December.
    3. Amelia U. Santos-Paulino & Mariagrazia Squicciarini & Peilei Fan, 2008. "R&D (Re)location: A Bird's Eye (Re)view," WIDER Working Paper Series RP2008-100, World Institute for Development Economic Research (UNU-WIDER).
    4. Kristof De Witte & Rui Marques, 2010. "Designing performance incentives, an international benchmark study in the water sector," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 18(2), pages 189-220, June.
    5. Aparicio, Juan & Ortiz, Lidia & Santín, Daniel, 2021. "Comparing group performance over time through the Luenberger productivity indicator: An application to school ownership in European countries," European Journal of Operational Research, Elsevier, vol. 294(2), pages 651-672.
    6. Cordero Ferrera, Jose Manuel & Alonso Morán, Edurne & Nuño Solís, Roberto & Orueta, Juan F. & Souto Arce, Regina, 2013. "Efficiency assessment of primary care providers: A conditional nonparametric approach," MPRA Paper 51926, University Library of Munich, Germany.
    7. Zhou, P. & Ang, B.W. & Poh, K.L., 2008. "A survey of data envelopment analysis in energy and environmental studies," European Journal of Operational Research, Elsevier, vol. 189(1), pages 1-18, August.
    8. Francesco Di Comite & D'Artis Kancs & Wouter Torfs, 2015. "Macroeconomic Modelling of R&D and Innovation Policies," JRC Research Reports JRC89558, Joint Research Centre.
    9. Andrea Bonaccorsi & Cinzia Daraio, 2013. "Knowledge spillover effects at the sub-regional level. Theory and estimation," DIAG Technical Reports 2013-13, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    10. Keller, Wolfgang, 2010. "International Trade, Foreign Direct Investment, and Technology Spillovers," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 793-829, Elsevier.
    11. Elina Berghäll, 2016. "Innovation, competition and technical efficiency," Cogent Business & Management, Taylor & Francis Journals, vol. 3(1), pages 1199522-119, December.
    12. Juan Aparicio & Magdalena Kapelko, 2019. "Enhancing the Measurement of Composite Indicators of Corporate Social Performance," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 144(2), pages 807-826, July.
    13. Cordero, José Manuel & Prior, Diego & Simancas Rodríguez, Rosa, 2013. "A comparison of public and private schools in Spain using robust nonparametric frontier methods," MPRA Paper 51375, University Library of Munich, Germany.
    14. Gabriella Sicilia & Rosa Simancas, 2023. "Eficiencia y equidad educativa en España: un análisis comparativo a nivel regional," Hacienda Pública Española / Review of Public Economics, IEF, vol. 245(2), pages 7-33, June.
    15. Rita Bastião & Nuno de Sousa Pereira, 2020. "Performance in the Delivery of Primary Health Care Services: A Longitudinal Analysis," CEF.UP Working Papers 2002, Universidade do Porto, Faculdade de Economia do Porto.
    16. Chen, Kaihua & Kou, Mingting & Fu, Xiaolan, 2018. "Evaluation of multi-period regional R&D efficiency: An application of dynamic DEA to China's regional R&D systems," Omega, Elsevier, vol. 74(C), pages 103-114.
    17. Halkos, George & Tzeremes, Nickolaos, 2007. "Examining the relationship between firm internationalization and firm performance: A nonparametric analysis," MPRA Paper 32082, University Library of Munich, Germany.
    18. Valentin Zelenyuk, 2019. "Data Envelopment Analysis and Business Analytics: The Big Data Challenges and Some Solutions," CEPA Working Papers Series WP072019, School of Economics, University of Queensland, Australia.
    19. Tourinho, Marco & Santos, Paulo Rosa & Pinto, Francisco Taveira & Camanho, Ana S., 2022. "Performance assessment of water services in Brazilian municipalities: An integrated view of efficiency and access," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).
    20. Suyanto, & Salim, Ruhul & Bloch, Harry, 2014. "Which firms benefit from foreign direct investment? Empirical evidence from Indonesian manufacturing," Journal of Asian Economics, Elsevier, vol. 33(C), pages 16-29.

    More about this item

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

    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:fep:journl:v:28:y:2017:i:1:p:34-49. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Editorial Secretary (email available below). General contact details of provider: https://edirc.repec.org/data/talouea.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.