This paper explores the determinants of innovative capability in a sample of multinational company (MNC) subsidiaries in four transition economies: Estonia, Hungary, Poland, and Slovenia. It finds that capability in product and process technology appears to be determined by a different set of variables than capability related to marketing and management knowledge. The most independent affiliates – those that are diversified, oriented towards the local market, established through acquisitions rather than greenfield investments, and where the foreign MNCs’ only hold minority ownership – are also those that acquire the strongest innovative capability in product and process technology. For marketing and management capability, the pattern is nearly the opposite. The highest levels of capability are recorded in subsidiaries that are closely tied to the parent company, with high foreign ownership shares and substantial exports back to the parent company. These differences can be expected to have some impact on the kinds of spillovers different kinds of foreign direct investment (FDI) projects may generate.
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Paper provided by The European Institute of Japanese Studies in its series EIJS Working Paper Series with number
224.
Length: 28 pages Date of creation: 11 Apr 2006 Date of revision: Publication status: Published in Post-Communist Economies, 2008, pages 57-75. Handle: RePEc:hhs:eijswp:0224
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Find related papers by JEL classification: F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Ksenia Yudaeva & Konstantin Kozlov & Natalia Melentieva & Natalia Ponomareva, 2003.
"Does foreign ownership matter?,"
The Economics of Transition,
The European Bank for Reconstruction and Development, vol. 11(3), pages 383-409, 09.
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