This paper deals with the interplay between foreign direct investment (FDI) and the industrial and innovation policies of host developing economies. It aims to redefine the nexus between these different, though yet strongly interconnected policy areas, by bringing the affiliates of multinational corporations already established in a host economy to the first level of analysis. It argues that host country governments should concentrate on enhancing innovativeness and development of existing foreign-owned affiliates, instead of striving to attract higher volumes of FDI inflows.
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Paper provided by United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology in its series UNU-MERIT Working Paper Series with number
030.
Find related papers by JEL classification: F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business F29 - International Economics - - International Factor Movements and International Business - - - Other L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance O25 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy O39 - Economic Development, Technological Change, and Growth - - Technological Change - - - Other
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