New empirical findings for international investment in intangible assets
This study empirically analyses the determinants of greenfield investment in intangible assets in emerging and industrialized countries. Data consists of host parent country pairs of greenfield FDI projects in (i) software (except video games), (ii) advertising, public relations and related activities, (iii) headquarters, (iv) research & development and (v) design, development & testing. With a world market share of 33 per cent in 2011 in terms of the number of projects, descriptive statistics show that the EU 27 is one of the most important locations for international greenfield investment in intangible assets. However, there was a decline in the EU 27s share of such projects after the recent financial and economic crisis, which is mainly due to the decrease in intra-EU greenfield FDI activities. In contrast, FDI inflows in intangible assets increased in the United States, in other non EU OECD countries and in emerging countries. Among the EU countries of Ireland, Luxembourg, the United Kingdom, Denmark, Belgium, Netherlands and Sweden are the most attractive locations for Non-EU investors, whereas the southern and East EU countries are least successful in attracting FDI projects in intangible assets. The results using fixed and random effects negative binomial regression models for 40 host and 26 parent countries during the period 2003–2010 show that FDI in intangible assets depends significantly positively on quantity of human capital, quality of human capital measured as the PISA score in maths and reading, costs of starting a business, broadband penetration, strength of investor protection, R&D endowment and direct R&D subsidies. Wage costs (or unit labour costs) have a significant negative impact on FDI inflows in intangible assets. Other policy factors, such as labour market regulations, product, or FDI regulations, do not have a significant impact. Separate estimates for the EU-27 countries show that corporate taxes matter for the international location decision for intangible assets. The empirical results presented may help to develop a proactive action plan to attract international investments in intangible assets in Europe.
|Date of creation:||Jul 2013|
|Date of revision:|
|Contact details of provider:|| |
|Order Information:|| Postal: WWWforEurope Project Office Austrian Institute of Economic Research Arsenal Objekt 20 A-1030 Vienna|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Charles R. Hulten & Janet X. Hao, 2012. "The Role Of Intangible Capital in the Transformation and Growth of the Chinese Economy," NBER Working Papers 18405, National Bureau of Economic Research, Inc.
- Haskel, J & Corrado, C & Jona-Lasinio, C & Iommi, M, 2012.
"Intangible capital and growth in advanced economies: measurement methods and comparative results,"
9913, Imperial College, London, Imperial College Business School.
- Carol Corrado & Jonathan Haskel & Cecilia Jona-Lasinio & Massimiliano Iommi, 2012. "Intangible Capital and Growth in Advanced Economies: Measurement Methods and Comparative Results," Economics Program Working Papers 12-03, The Conference Board, Economics Program.
- Corrado, Carol & Haskel, Jonathan & Jona-Lasinio, Cecilia & Iommi, Massimiliano, 2012. "Intangible Capital and Growth in Advanced Economies: Measurement Methods and Comparative Results," IZA Discussion Papers 6733, Institute for the Study of Labor (IZA).
- Emanuela Marrocu & Raffaele Paci & Marco Pontis, 2012.
"Intangible capital and firms' productivity,"
Industrial and Corporate Change,
Oxford University Press, vol. 21(2), pages 377-402, April.
- von Zedtwitz, Maximilian & Gassmann, Oliver, 2002. "Market versus technology drive in R&D internationalization: four different patterns of managing research and development," Research Policy, Elsevier, vol. 31(4), pages 569-588, May.
- Michele Cincera & Claudio Cozza & Alexander Tübke, 2010. "Drivers and policies for increasing and internationalising R&D activities of EU MNEs," JRC Working Papers on Corporate R&D and Innovation 2010-02, Directorate Growth & Innovation and JRC-Seville, Joint Research Centre.
- Konstantinos A. Melachroinos & Nigel Spence, 2013. "Intangible Investment and Regional Productivity in Great Britain," Regional Studies, Taylor & Francis Journals, vol. 47(7), pages 1048-1064, July.
- Smarzynska Javorcik, Beata, 2004.
"The composition of foreign direct investment and protection of intellectual property rights: Evidence from transition economies,"
European Economic Review,
Elsevier, vol. 48(1), pages 39-62, February.
- Smarzynska, Beata K., 2002. "The composition of foreign direct investment and protection of intellectual property rights : evidence from transition economies," Policy Research Working Paper Series 2786, The World Bank.
- Martin Berger & Heinz Hollenstein, 2012.
"Determinants of Equity-based and Co-operative Foreign R&D and Impact on the Parent Firm’s Performance,"
FIW Working Paper series
- Heinz Hollenstein & Martin Berger, 2012. "Determinants of Equity-based and Co-operative Foreign R&D and Impact on the Parent Firm’s Performance," KOF Working papers 12-305, KOF Swiss Economic Institute, ETH Zurich.
- Devereux, Michael P & Griffith, Rachel, 2003.
"Evaluating Tax Policy for Location Decisions,"
International Tax and Public Finance,
Springer, vol. 10(2), pages 107-26, March.
- Braunerhjelm, Pontus, 1996. "The relation between firm-specific intangibles and exports," Economics Letters, Elsevier, vol. 53(2), pages 213-219, November.
- Edquist, Harald, 2009.
"Can Investment in Intangibles Explain the Swedish Productivity Boom in the 1990s?,"
Working Paper Series
809, Research Institute of Industrial Economics.
- Harald Edquist, 2011. "CAN INVESTMENT IN INTANGIBLES EXPLAIN THE SWEDISH PRODUCTIVITY BOOM IN THE 1990s?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57(4), pages 658-682, December.
- Dunning, John H., 2000. "The eclectic paradigm as an envelope for economic and business theories of MNE activity," International Business Review, Elsevier, vol. 9(2), pages 163-190, April.
- Mauro Giorgio Marrano & Jonathan Haskel & Gavin Wallis, 2009.
"What Happened To The Knowledge Economy? Ict, Intangible Investment, And Britain'S Productivity Record Revisited,"
Review of Income and Wealth,
International Association for Research in Income and Wealth, vol. 55(3), pages 686-716, 09.
- Mauro Giorgio Marrano & Jonathan Haskel & Gavin Wallis, 2007. "What Happened to the Knowledge Economy? ICT, Intangible Investment and Britain's Productivity Record Revisited," Working Papers 603, Queen Mary University of London, School of Economics and Finance.
- Narula, Rajneesh & Bellak, Christian, 2008.
"EU enlargement and consequences for FDI assisted industrial development,"
MERIT Working Papers
067, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
- Christian Bellak & Rajneesh Narula, 2008. "EU enlargement and consequences for FDI assisted industrial development," Economics & Management Discussion Papers em-dp2008-69, Henley Business School, Reading University.
- Zwinkels, Remco C.J. & Beugelsdijk, Sjoerd, 2010. "Gravity equations: Workhorse or Trojan horse in explaining trade and FDI patterns across time and space?," International Business Review, Elsevier, vol. 19(1), pages 102-115, February.
- Laurie Hunter & Elizabeth Webster & Anne Wyatt, 2012. "Accounting for Expenditure on Intangibles," Abacus, Accounting Foundation, University of Sydney, vol. 48(1), pages 104-145, 03.
- van Ark, Bart & Hao, Janet X. & Corrado, Carol & Hulten, Charles, 2009. "Measuring intangible capital and its contribution to economic growth in Europe," EIB Papers 3/2009, European Investment Bank, Economics Department.
- Felix Roth & Anna-Elisabeth Thum, 2013. "Intangible Capital and Labor Productivity Growth: Panel Evidence for the EU from 1998–2005," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(3), pages 486-508, 09.
- Sjoerd Beugelsdijk & Jean-François Hennart & Arjen Slangen & Roger Smeets, 2010.
"Why and how FDI stocks are a biased measure of MNE affiliate activity,"
Journal of International Business Studies,
Palgrave Macmillan, vol. 41(9), pages 1444-1459, December.
- Beugelsdijk, S. & Hennart, J.M.A. & Slangen, A.H.L. & Smeets, R., 2010. "Why and how FDI stocks are a biased measure of MNE affiliate activity," Other publications TiSEM 48b61eb8-c39a-4565-8b10-e, Tilburg University, School of Economics and Management.
- Alberto Di Minin & Jieyin Zhang, 2010. "An Exploratory Study on International R&D Strategies of Chinese Companies in Europe," Review of Policy Research, Policy Studies Organization, vol. 27(4), pages 433-455, 07.
- Wooldridge, Jeffrey M., 1999.
"Distribution-free estimation of some nonlinear panel data models,"
Journal of Econometrics,
Elsevier, vol. 90(1), pages 77-97, May.
- Wooldridge, J.M., 1990. "Distribution-Free Estimation Of Some Nonlinear Panel Data Models," Working papers 564, Massachusetts Institute of Technology (MIT), Department of Economics.
- Arie Y Lewin & Silvia Massini & Carine Peeters, 2009.
"Why are companies offshoring innovation? The emerging global race for talent,"
Journal of International Business Studies,
Palgrave Macmillan, vol. 40(8), pages 1406-1406, October.
- Arie Y Lewin & Silvia Massini & Carine Peeters, 2009. "Why are companies offshoring innovation? The emerging global race for talent," Journal of International Business Studies, Palgrave Macmillan, vol. 40(6), pages 901-925, August.
- Ito, Banri & Wakasugi, Ryuhei, 2007. "What factors determine the mode of overseas R&D by multinationals? Empirical evidence," Research Policy, Elsevier, vol. 36(8), pages 1275-1287, October.
- Miao Wang & M. C. Sunny Wong, 2009. "What Drives Economic Growth? The Case of Cross-Border M&A and Greenfield FDI Activities," Kyklos, Wiley Blackwell, vol. 62(2), pages 316-330, 04.
- Diana Farrell, 2005. "Offshoring: Value Creation through Economic Change," Journal of Management Studies, Wiley Blackwell, vol. 42(3), pages 675-683, 05.
- Jerry A. Hausman & Bronwyn H. Hall & Zvi Griliches, 1984.
"Econometric Models for Count Data with an Application to the Patents-R&D Relationship,"
NBER Technical Working Papers
0017, National Bureau of Economic Research, Inc.
- Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-38, July.
- Mayer, Thierry & Zignago, Soledad, 2006.
"Notes on CEPII’s distances measures,"
26469, University Library of Munich, Germany.
- Thierry Mayer & Soledad Zignago, 2011. "Notes on CEPII’s distances measures: The GeoDist database," Working Papers 2011-25, CEPII research center.
- Carol A. Corrado & Charles R. Hulten & Daniel E. Sichel, 2006.
"Intangible Capital and Economic Growth,"
NBER Working Papers
11948, National Bureau of Economic Research, Inc.
- Chakrabarti, Avik, 2001. "The Determinants of Foreign Direct Investment: Sensitivity Analyses of Cross-Country Regressions," Kyklos, Wiley Blackwell, vol. 54(1), pages 89-113.
- Runjuan Liu & Dorothee J Feils & Barry Scholnick, 2011. "Why are different services outsourced to different countries?," Journal of International Business Studies, Palgrave Macmillan, vol. 42(4), pages 558-571, May.
- Michele Cincera, 2012. "Drivers and Policies for Increasing and Internationalising R&D Activities of EU Multinational Enterprises," ULB Institutional Repository 2013/147100, ULB -- Universite Libre de Bruxelles.
- Carol Corrado & John Haltiwanger & Dan Sichel, 2005. "Measuring Capital in the New Economy," NBER Books, National Bureau of Economic Research, Inc, number corr05-1.
- Carol Corrado & Charles Hulten & Daniel Sichel, 2009. "Intangible Capital And U.S. Economic Growth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 661-685, 09.
- Arvanitis, Spyros & Loukis, Euripidis N., 2009. "Information and communication technologies, human capital, workplace organization and labour productivity: A comparative study based on firm-level data for Greece and Switzerland," Information Economics and Policy, Elsevier, vol. 21(1), pages 43-61, February.
- Greenhalgh, Christine & Rogers, Mark, 2006.
"The value of innovation: The interaction of competition, R&D and IP,"
Elsevier, vol. 35(4), pages 562-580, May.
- Christine Greenhalgh & Mark Rogers, 2004. "The Value of Innovation: The Interaction of Competition, R&D and IP," Economics Series Working Papers 192, University of Oxford, Department of Economics.
- Jonathan P Doh & Kraiwinee Bunyaratavej & Eugene D Hahn, 2009. "Separable but not equal: The location determinants of discrete services offshoring activities," Journal of International Business Studies, Palgrave Macmillan, vol. 40(6), pages 926-943, August.
- Jalava, Jukka & Aulin-Ahmavaara, Pirkko & Alanen, Aku, 2007. "Intangible Capital in the Finnish Business Sector 1975-2005," Discussion Papers 1103, The Research Institute of the Finnish Economy.
- Bunyaratavej, Kraiwinee & Hahn, Eugene D. & Doh, Jonathan P., 2008. "Multinational investment and host country development: Location efficiencies for services offshoring," Journal of World Business, Elsevier, vol. 43(2), pages 227-242, March.
- Maria Elena Bontempi & Jacques Mairesse, 2008. "Intangible Capital and Productivity: An Exploration on a Panel of Italian Manufacturing Firms," NBER Working Papers 14108, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:feu:wfewop:y:2013:m:7:d:0:i:30. 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: ()
If references are entirely missing, you can add them using this form.