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Technological Innovation in New EU Markets

Listed author(s):
  • Ainura Uzagalieva
  • Evžen Kocenda
  • Antonio Menezes

We analyze the role of innovation in the technological development of four new members of the European Union: the Czech Republic, Hungary, Poland, and Slovakia. For that purpose, we use a novel approach, modeling the empirical relationship between intraindustrial bilateral trade flows, which represent the level of technological progress, and innovation expenditures within the context of a gravity model having a set of appropriate instrumental variables to account for the potential endogeneity of innovation to trade. We show that innovation efforts in high-tech industries exhibit a strong effect on the technological progress of the region and they are closely linked to foreign direct investment and multinationals. As foreign-owned subsidiaries become a part of the innovation systems and industrial structure of the host country, they promote overall technological growth in the region.

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Article provided by M.E. Sharpe, Inc. in its journal Emerging Markets Finance and Trade.

Volume (Year): 48 (2012)
Issue (Month): 5 (September)
Pages: 48-65

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Handle: RePEc:mes:emfitr:v:48:y:2012:i:5:p:48-65
Contact details of provider: Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=111024

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