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Heterogeneous Foreign Direct Investment and Local Innovation in Italian Provinces

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Listed:
  • Andrea Ascani
  • Pierre-Alexandre Balland
  • Andrea Morrison

Abstract

Locations all over the world compete to attract Foreign Direct Investment (FDI) in order to access knowledge, technology, and boost economic development. Although the literature shows a positive impact of FDI, little is known about (1) its effect on neighbouring regions and (2) which type of FDI generate relevant effects. To fill this gap, we investigate the FDI-innovation relationship in Italian provinces. By adopting the Pavitt taxonomy of manufacturing sectors, we suggest that only specific categories of FDI benefit local economies, whilst other types may produce negative outcomes. The evidence on the spatial implications of FDI remains limited.

Suggested Citation

  • Andrea Ascani & Pierre-Alexandre Balland & Andrea Morrison, 2018. "Heterogeneous Foreign Direct Investment and Local Innovation in Italian Provinces," Papers in Evolutionary Economic Geography (PEEG) 1820, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised May 2018.
  • Handle: RePEc:egu:wpaper:1820
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    File URL: http://econ.geo.uu.nl/peeg/peeg1820.pdf
    File Function: Version May 2018
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    References listed on IDEAS

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    More about this item

    Keywords

    foreign direct investment; spillovers; Pavitt taxonomy; FDI heterogeneity;

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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