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Foreign Ownership and Within-MNEs GVC Participation as Determinants of Innovation Activities: A CIS-Based Firm-Level Analysis

Author

Listed:
  • Andrzej Cieślik

    (University of Warsaw, Faculty of Economic Sciences)

  • Jan Jakub Michałek

    (University of Warsaw, Faculty of Economic Sciences)

  • Krzysztof Szczygielski

    (University of Warsaw, Faculty of Economic Sciences)

  • Jacek Lewkowicz

    (University of Warsaw, Faculty of Economic Sciences)

  • Jerzy Mycielski

    (University of Warsaw, Faculty of Economic Sciences)

Abstract

In this paper we study the relationship between foreign firm ownership and innovation activities in a wide group of West European and Central and East European countries. Based on a dataset including more than 100,000 firms covered by the 2014 edition of the Community Innovation Survey, we examine the role of home- and host country effects in firms’ decisions to introduce various forms of innovation. In addition, we identify a group of foreign-owned firms that specialize in exporting and interpret them as participants of hierarchic global value chains organized by multinational enterprises. We show that while foreign direct investment, especially from Germany, is positively associated with innovation, the opposite effect is observed in the case of hierarchic global value chains’ participants. The negative impact of within-multinationals global value chains on innovation is more pronounced in the affiliates located in the Central and East European countries.

Suggested Citation

  • Andrzej Cieślik & Jan Jakub Michałek & Krzysztof Szczygielski & Jacek Lewkowicz & Jerzy Mycielski, 2021. "Foreign Ownership and Within-MNEs GVC Participation as Determinants of Innovation Activities: A CIS-Based Firm-Level Analysis," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 13(2), pages 189-211, June.
    • Handle: RePEc:psc:journl:v:13:y:2021:i:2:p:189-211
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    More about this item

    Keywords

    innovation; FDI; GVCs; MNEs; CIS data;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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