IDEAS home Printed from https://ideas.repec.org/a/kap/revind/v25y2004i2p205-227.html
   My bibliography  Save this article

Foreign Direct Investment, Imports and Innovations in the Service Industry

Author

Listed:
  • Knut Blind
  • Andre Jungmittag

    ()

Abstract

The paper analyses for the first time empirically the impact of foreign competition due to inward foreign direct investment and imports on the innovation activities using data of German service firms. Based on the hypothesis that foreign competition has a disciplining effect on domestic markets derived from the manufacturing sector, a positive impact can be expected on innovation in the service sector, while other theoretical considerations do not absolutely support this optimistic view. In the empirical analysis, variants of two probit models are estimated for a sample of 2,019 service firms to explain their product and process innovation activities. The results show that both foreign direct investment and imports have highly significant positive effects on product and process innovations. Vice versa, the export and foreign production activities of domestic firms support innovations, too. Copyright Kluwer Academic Publishers 2004

Suggested Citation

  • Knut Blind & Andre Jungmittag, 2004. "Foreign Direct Investment, Imports and Innovations in the Service Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 25(2), pages 205-227, June.
  • Handle: RePEc:kap:revind:v:25:y:2004:i:2:p:205-227
    DOI: 10.1007/s11151-004-3537-x
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11151-004-3537-x
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Craig Lofts & Joanne Loundes, 2000. "Foreign Ownership, Foreign Competition and Innovation in Australian Enterprises," Melbourne Institute Working Paper Series wp2000n20, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Love, James H. & Ganotakis, Panagiotis, 2013. "Learning by exporting: Lessons from high-technology SMEs," International Business Review, Elsevier, vol. 22(1), pages 1-17.
    2. Armando Silva & Ana Paula Africano & Oscar Afonso, 2009. "Which Portuguese firms are more innovative? The importance of multinationals and exporters," FEP Working Papers 326, Universidade do Porto, Faculdade de Economia do Porto.
    3. Woerter, Martin & Roper, Stephen, 2010. "Openness and innovation--Home and export demand effects on manufacturing innovation: Panel data evidence for Ireland and Switzerland," Research Policy, Elsevier, vol. 39(1), pages 155-164, February.
    4. Richard Harris & John Moffat, 2011. "R&D, Innovation and Exporting," SERC Discussion Papers 0073, Spatial Economics Research Centre, LSE.
    5. Stiebale, Joel, 2012. "Cross-Border M&A and Innovative Activity: Firm-Level Evidence," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62027, Verein für Socialpolitik / German Economic Association.
    6. Jos L. T. Blank & Vivian G. Valdmanis, 2015. "Technology diffusion in hospitals: a log odds random effects regression model," International Journal of Health Planning and Management, Wiley Blackwell, vol. 30(3), pages 246-259, July.
    7. Priit Vahter, "undated". "Does FDI spur innovation, productivity and knowledge sourcing by incumbent firms? Evidence from manufacturing industry in Estonia," Discussion Papers 10/09, University of Nottingham, GEP.
    8. Roberto Antonietti & Raffaello Bronzini & Giulio Cainelli, 2015. "Inward greenfield FDI and innovation," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(1), pages 93-116, March.
    9. Welfens, Paul J. J. & Irawan, Tony, 2014. "European Innovation Dynamics and US Economic Impact: Theory and Empirical Analysis," IZA Discussion Papers 8507, Institute for the Study of Labor (IZA).
    10. R Harris & Q Li, "undated". "Exporting, R&D and Absorptive Capacity in UK Establishments: Evidence from the 2001 Community Innovation Survey," Working Papers 2006_19, Business School - Economics, University of Glasgow.
    11. Chia-Lin Chang & Sung-Po Chen & Michael McAleer, 2013. "Globalization and knowledge spillover: international direct investment, exports and patents," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 22(4), pages 329-352, June.
    12. Stiebale, Joel, 2010. "The Impact of Foreign Acquisitions on the Investors' R&D Activities – Firm-level Evidence," Ruhr Economic Papers 161, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    13. Christopher F. Baum & Mustafa Caglayan & Oleksandr Talavera, 2016. "R&D Expenditures and Geographical Sales Diversification," Manchester School, University of Manchester, vol. 84(2), pages 197-221, March.
    14. Alexander Glas & Michael Hübler & Peter Nunnenkamp, 2016. "Catching up of emerging economies: the role of capital goods imports, FDI inflows, domestic investment and absorptive capacity," Applied Economics Letters, Taylor & Francis Journals, vol. 23(2), pages 117-120, February.
    15. Muhammad Irfan Chani & Muhammad Azam & Akmal Younas, 2014. "The Causal Relationship between Foreign Direct Investment, Imports and Exports in Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 3(3), pages 142-149, September.
    16. Stiebale, Joel & Reize, Frank, 2011. "The impact of FDI through mergers and acquisitions on innovation in target firms," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 155-167, March.
    17. Shin, Inyong & Kim, Hyunho, 2010. "The effect of subsidy policies on the product quality improvement," Economic Modelling, Elsevier, vol. 27(3), pages 687-696, May.
    18. Sergio De Nardis & Marco Ventura, 2012. "Effect Of Firm Innovation On Labour Force Composition: The Case Of Italian Manufacturing," Economics Bulletin, AccessEcon, vol. 32(1), pages 338-353.
    19. repec:zbw:rwirep:0161 is not listed on IDEAS
    20. Döhrn, Roland & Engel, Dirk & Stiebale, Joel, 2008. "Außenhandel und ausländische Direktinvestitionen deutscher Unternehmen," Studien zum deutschen Innovationssystem 3-2008, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    21. Stiebale, Joel & Reize, Frank, 2008. "The Impact of FDI on Innovation in Target Firms," Ruhr Economic Papers 50, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    22. Joel Stiebale, 2010. "The Impact of Foreign Acquisitions on the Investors‘ R&D Activities – Firm-level Evidence," Ruhr Economic Papers 0161, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    23. Love, James H. & Roper, Stephen & Bryson, John R., 2011. "Openness, knowledge, innovation and growth in UK business services," Research Policy, Elsevier, vol. 40(10), pages 1438-1452.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:revind:v:25:y:2004:i:2:p:205-227. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.