Effects of Foreign Ownership on Innovation Activities - Empirical Evidence for 12 European Countries
AbstractIn the present study we investigate the relationship between foreign ownership and innovation activities using the firm-level data of the third Community Innovation Survey (CIS) covering 12 European countries. Probit estimates based on 28,000 firms observations show that foreign owned firms are more innovative than domestic firms, particularly in the New EU Member States. However, results from the Blinder Oaxaca decomposition of the differences in the percentage of innovating firms between foreign owned and domestic firms reveals that the differences are mainly due to the different firm characteristics rather than the differences in coefficients. In particular, the dominance of foreign owned firms in the largest firm size group is the main factor contributing to the gap in the percentage of innovators between foreign owned firms and domestic firms. Furthermore, using the fractional logit model, we find that in the New EU Member States, foreign ownership has a positive and significant impact on the share of market novelties as well as on the share of new products in turnover. In this case, the results from the Blinder Oaxaca decomposition analysis indicate that the ownership difference in the share of innovative sales is not due to the differences in the observed firms' characteristics.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by FIW in its series FIW Research Reports series with number I-020.
Date of creation: Jun 2008
Date of revision:
Contact details of provider:
Postal: FIW Project Office Austrian Institute of Economic Research Arsenal Objekt 20 A-1030 Vienna
Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
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.:
- Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107 Elsevier.
- Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
- Rachel Griffith & Stephen Redding & Helen Simpson, 2004.
"Foreign Ownership and Productivity: New Evidence from the Service Sector and the R&D Lab,"
LSE Research Online Documents on Economics
3699, London School of Economics and Political Science, LSE Library.
- Rachel Griffith & Stephen Redding & Helen Simpson, 2004. "Foreign Ownership and Productivity: New Evidence from the Service Sector and the R&D Lab," Oxford Review of Economic Policy, Oxford University Press, vol. 20(3), pages 440-456, Autumn.
- Rachel Griffith & Stephen Redding & Helen Simpson, 2004. "Foreign ownership and productivity: new evidence from the service sector and the R&D lab," IFS Working Papers W04/22, Institute for Fiscal Studies.
- Griffith, Rachel & Redding, Stephen J & Simpson, Helen, 2004. "Foreign Ownership and Productivity: New Evidence from the Service Sector and the R&D Lab," CEPR Discussion Papers 4691, C.E.P.R. Discussion Papers.
- Rachel Griffith & Stephen Redding & Helen Simpson, 2004. "Foreign Ownership and Productivity: New Evidence from the Service Sector and the R&D Lab," CEP Discussion Papers dp0649, Centre for Economic Performance, LSE.
- Brouwer, Erik & Kleinknecht, Alfred, 1996. " Firm Size, Small Business Presence and Sales of Innovative Products: A Micro-econometric Analysis," Small Business Economics, Springer, vol. 8(3), pages 189-201, June.
- Leslie E. Papke & Jeffrey M. Wooldridge, 1993.
"Econometric Methods for Fractional Response Variables with an Application to 401(k) Plan Participation Rates,"
NBER Technical Working Papers
0147, National Bureau of Economic Research, Inc.
- Papke, Leslie E & Wooldridge, Jeffrey M, 1996. "Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 619-32, Nov.-Dec..
- Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006.
"Innovation and Productivity Across Four European Countries,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 22(4), pages 483-498, Winter.
- Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity across Four European Countries," NBER Working Papers 12722, National Bureau of Economic Research, Inc.
- Alfred Kleinknecht & Kees Van Montfort & Erik Brouwer, 2002. "The Non-Trivial Choice between Innovation Indicators," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(2), pages 109-121.
- Sadowski, Bert M. & Sadowski-Rasters, Gaby, 2006. "On the innovativeness of foreign affiliates: Evidence from companies in The Netherlands," Research Policy, Elsevier, vol. 35(3), pages 447-462, April.
- Peters, Bettina & Lööf, Hans & Janz, Norbert, 2003.
"Firm Level Innovation and Productivity: Is there a Common Story Across Countries?,"
ZEW Discussion Papers
03-26, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Janz, Norbert & Lööf, Hans & Peters, Bettina, 2004. "Firm Level Innovation and Productivity - Is there a Common Story Across Countries?," Working Paper Series in Economics and Institutions of Innovation 24, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
- Choi, Suk Bong & Lee, Soo Hee & Williams, Christopher, 2011. "Ownership and firm innovation in a transition economy: Evidence from China," Research Policy, Elsevier, vol. 40(3), pages 441-452, April.
- Jaan Masso & Tõnu Roolaht & Urmas Varblane, 2010.
"Foreign Direct Investment And Innovation In Central And Eastern Europe: Evidence From Estonia,"
University of Tartu - Faculty of Economics and Business Administration Working Paper Series
67, Faculty of Economics and Business Administration, University of Tartu (Estonia).
- Masso, Jaan & Roolaht, Tõnu & Varblane, Urmas, 2010. "Foreign direct investment and innovation in Central and eastern Europe : evidence from Estonia," Bank of Estonia Working Papers wp2010-05, Bank of Estonia, revised 14 Apr 2010.
- Rahmouni, Mohieddine & Ayadi, Mohamed & YIldIzoglu, Murat, 2010. "Characteristics of innovating firms in Tunisia: The essential role of external knowledge sources," Structural Change and Economic Dynamics, Elsevier, vol. 21(3), pages 181-196, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.