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Inward foreign direct investment and innovation: evidence from Italian provinces

Author

Listed:
  • Roberto Antonietti

    (University of Padova)

  • Raffaello Bronzini

    (Bank of Italy)

  • Giulio Cainelli

    (Unicversity of Padova)

Abstract

This paper investigates empirically whether inward greenfield foreign direct investment (FDI) is related to greater sectorial innovation in the host Italian provinces. We combine several sources of data to estimate panel count models, regressing the annual number of patents in each province and industry against a series of lagged FDI variables. Our results show that a positive relationship between FDI and local patenting emerges only for services. In particular, we find that greater inward FDI in services positively influences local patenting activity in knowledge-intensive business services. These results are robust to endogeneity and the inclusion of province controls and fixed effects.

Suggested Citation

  • Roberto Antonietti & Raffaello Bronzini & Giulio Cainelli, 2015. "Inward foreign direct investment and innovation: evidence from Italian provinces," Temi di discussione (Economic working papers) 1006, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_1006_15
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    File URL: http://www.bancaditalia.it/pubblicazioni/temi-discussione/2015/2015-1006/en_tema_1006.pdf
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    Citations

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    Cited by:

    1. Andre Jungmittag & Paul J. J. Welfens, 2020. "EU-US trade post-trump perspectives: TTIP aspects related to foreign direct investment and innovation," International Economics and Economic Policy, Springer, vol. 17(1), pages 259-294, February.
    2. Andre Jungmittag & Paul J.J. Welfens, 2016. "Beyond EU-US Trade Dynamics: TTIP Effects Related to Foreign Direct Investment and Innovation," EIIW Discussion paper disbei212, Universit├Ątsbibliothek Wuppertal, University Library.

    More about this item

    Keywords

    inward greenfield FDI; innovation; patents; research and development; panel count models;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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