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Do External Knowledge Spillovers Induce Firms'Innovations? Evidence from Slovenia

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  • Joze P. Damijan
  • Andreja Jaklic
  • Matija Rojec

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Abstract

The paper analyses whether, and to what extent, firm's ability to innovate is induced by firm's own R&D activity and to what extent by factors external to firm. It first estimates the impact of firms' internal R&D capital and external R&D spillovers on firms' innovation activity within an integrated dynamic model. In the second step, we then estimate the impact of firms'innovations on firms?productivity growth. Using the firm level data on innovation activity combined with firms' financial data for a large sample of Slovenian firms in the period 1996-2002, the paper produces three main findings. First, firm's own R&D expenditures as well as external knowledge spillovers, such as national and international public R&D subsidies, foreign ownership and intra-sector innovation spillovers do enhance firm's ability to innovate. Second, innovations as a result of firm's R&D do contribute substantially to firm's total factor productivity growth. And third, foreign ownership has a double impact on firm's TFP growth - it first enhances firm's ability to innovate and then it additionally contributes to firm's TFP growth via superior organization techniques and other channels of knowledge diffusion.

Suggested Citation

  • Joze P. Damijan & Andreja Jaklic & Matija Rojec, 2005. "Do External Knowledge Spillovers Induce Firms'Innovations? Evidence from Slovenia," LICOS Discussion Papers 15605, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  • Handle: RePEc:lic:licosd:15605
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    File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp156.pdf
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:jpolmo:v:40:y:2018:i:1:p:37-59 is not listed on IDEAS
    2. Katarzyna Zawalińska & Nhi Tran & Adam Płoszaj, 2016. "Planning R&D in a Post Centrally-Planned Economy: Assessing the Macroeconomic Effects in Poland," Centre of Policy Studies/IMPACT Centre Working Papers g-268, Victoria University, Centre of Policy Studies/IMPACT Centre.
    3. Andreja Jaklic & Joze P. Damijan & Matija Rojec, 2008. "Innovation Cooperation and Innovation Activity of Slovenian Enterprises," LICOS Discussion Papers 20108, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    4. Jože.P.Damijan & Črt. Kostevc, 2010. "Learning from trade through innovation: Causal link between imports, exports and innovation in Spanish microdata," LICOS Discussion Papers 26410, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    5. Liu, Xiaohui & Buck, Trevor, 2007. "Innovation performance and channels for international technology spillovers: Evidence from Chinese high-tech industries," Research Policy, Elsevier, vol. 36(3), pages 355-366, April.
    6. Liu, Xiaohui & Zou, Huan, 2008. "The impact of greenfield FDI and mergers and acquisitions on innovation in Chinese high-tech industries," Journal of World Business, Elsevier, vol. 43(3), pages 352-364, July.
    7. Joze P. Damijan & Crt Kostevc & Matija Rojec, 2008. "Innovation and Firms' Productivity Growth in Slovenia: Sensitivity of Results to Sectoral Heterogeneity and to Estimation Method," LICOS Discussion Papers 20308, LICOS - Centre for Institutions and Economic Performance, KU Leuven.

    More about this item

    Keywords

    innovation; external knowledge spillovers; FDI; Slovenia;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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