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Technological Imitation and Innovation in New European Union Markets

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  • Ainura Uzagalieva
  • Evžen Kocenda
  • Antonio Menezes

Abstract

We analyze the role of imitation and innovation in promoting technological progress in new members of European Union: the Czech Republic, Hungary, Poland and Slovakia. The two modes of technological development—innovation and imitation—are distinguished from one another by identifying the dominant orientation of innovation efforts at the industry level. Specific industry features and the origin, structure and size of foreign direct investments in these countries are utilized for this purpose. The empirical relationship between intra-industrial bilateral trade flows, which proxy the level of technological progress, and innovation expenditures is analyzed using a gravity model. During the estimation stage, we use appropriate instruments to account for the potential endogeneity of innovation to trade. The results reveal the important role of foreign direct investment and multinationals in the technological progress of the region. Specifically, technological progress that is due to innovation is driven mainly by affiliates of foreign firms and multinationals.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3039.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_3039

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Keywords: foreign direct investment; innovation; imitation; international trade; European Union;

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References

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Cited by:
  1. Oxana Babecka Kucharcukova & Jan Babecky & Martin Raiser, 2010. "A Gravity Approach to Modelling International Trade in South-Eastern Europe and the Commonwealth of Independent States: The Role of Geography, Policy and Institutions," Working Papers 2010/04, Czech National Bank, Research Department.
  2. Oxana Babecká Kucharčuková & Jan Babecký & Martin Raiser, 2012. "Gravity Approach for Modelling International Trade in South-Eastern Europe and the Commonwealth of Independent States: The Role of Geography, Policy and Institutions," Open Economies Review, Springer, vol. 23(2), pages 277-301, April.
  3. Hanousek, Jan & Kocenda, Evzen & Maurel, Mathilde, 2011. "Direct and indirect effects of FDI in emerging European markets: A survey and meta-analysis," Economic Systems, Elsevier, vol. 35(3), pages 301-322, September.

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