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The short-run effects of knowledge intensive greenfield FDI on new domestic entry

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  • Sara Amoroso

    () (European Commission)

  • Bettina Müller

    () (Centre for European Economic Research (ZEW))

Abstract

Abstract Existing evidence on the impact of foreign direct investment on domestic economies remains ambiguous. Positive technology spillovers of foreign investment may be outweighed by negative crowding out effect due to increased competition. In this paper, we employ a unique country/sector-level data set to investigate the impact of what is considered the ‘best’ type of foreign investment—greenfield knowledge intensive FDI—on domestic entry. Our results suggest that, in the short run, this type of FDI is positively related to the entry rate in the host country, if the domestic sector is either dynamic, or highly R&D intensive. These sectors may be respectively characterized by lower entry costs, which encourage a ‘trial-and-error’ learning business approach, and by a higher level of absorptive capacity which increases the chance of technology transfer.

Suggested Citation

  • Sara Amoroso & Bettina Müller, 2018. "The short-run effects of knowledge intensive greenfield FDI on new domestic entry," The Journal of Technology Transfer, Springer, vol. 43(3), pages 815-836, June.
  • Handle: RePEc:kap:jtecht:v:43:y:2018:i:3:d:10.1007_s10961-017-9575-y
    DOI: 10.1007/s10961-017-9575-y
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    1. repec:gam:jsusta:v:10:y:2018:i:4:p:1219-:d:141496 is not listed on IDEAS
    2. Sara Amoroso & Pietro Moncada-Paternò-Castello, 2018. "Inward Greenfield FDI and Patterns of Job Polarization," Sustainability, MDPI, Open Access Journal, vol. 10(4), pages 1-20, April.
    3. Jasmine Mondolo, 2018. "How do informal institutions influence inward FDI? A systematic review," "Marco Fanno" Working Papers 0218, Dipartimento di Scienze Economiche "Marco Fanno".

    More about this item

    Keywords

    Foreign direct investments; Knowledge spillovers; New firm entry;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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