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Do FDI and Patents Drive Sophistication of Exports? A Panel Data Approach

Author

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  • Seren Ozsoy
  • Burcu Fazlioglu
  • Sinan Esen

Abstract

This paper investigates whether inflows of FDI and innovative activities act as a channel of knowledge spillovers in improving quality of countries' output. In measuring export quality, sophistication of a country's export basket is utilized. Utilizing panel data of countries for the period 2002-2015 and applying GMM methodology, the results indicate that the level of financial development, the quality of human capital and globalization of a country have a determinant role on the relation between knowledge spillover channels and the quality of exports. Patent applications generally positively affect sophistication of exports. FDI serves as a channel for knowledge spillovers to benefit the sophistication level of exports only for developed, more educated, financially developed and globalized countries.

Suggested Citation

  • Seren Ozsoy & Burcu Fazlioglu & Sinan Esen, 2021. "Do FDI and Patents Drive Sophistication of Exports? A Panel Data Approach," Prague Economic Papers, Prague University of Economics and Business, vol. 2021(2), pages 216-244.
    • Handle: RePEc:prg:jnlpep:v:2021:y:2021:i:2:id:755:p:216-244
    DOI: 10.18267/j.pep.755
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    Citations

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    Cited by:

    1. Idrys Fransmel Okombi & Beaudelaire Francois Tsinguia-Kenfack, 2024. "Foreign direct investment and economic complexity in developing countries: does public expenditure on education matter?," SN Business & Economics, Springer, vol. 4(1), pages 1-38, January.
    2. Stéphane Mbiankeu Nguea & Hervé Kaffo Fotio & Louise Angèle Baida, 2022. "Investigating the effects of globalization on economic sophistication in selected African countries," African Development Review, African Development Bank, vol. 34(3), pages 324-338, September.

    More about this item

    Keywords

    Knowledge spillovers; sophistication of export; patent applications; FDI;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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