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Determinants of Innovative Activities: Evidence from Europe and Central Asia Region

Author

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  • Lau, Chi Keung Marco
  • Yang, Fu Steve
  • Zhang, Zhe
  • Leung, Vincent K.K.

Abstract

Recent studies in the innovation literature reveal that Foreign Direct Investment (FDI) promotes the innovation activities in the recipent country through spillover effects. In this paper we extend the existing literature by incooprating the corruption index in the estimation procedure. Using a cross-country analysis from the Europe and Central Asia (ECA) region , covering 57 countries over the period of 1995-2010, we find no evidence of FDI spillover effect on innovative activity. However, corporate corruption and expenditure on education sector are positively related to the number of patents applications. Our study shed light on the national innovation activities and anti-corruption programs.

Suggested Citation

  • Lau, Chi Keung Marco & Yang, Fu Steve & Zhang, Zhe & Leung, Vincent K.K., 2013. "Determinants of Innovative Activities: Evidence from Europe and Central Asia Region," MPRA Paper 47153, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:47153
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    File URL: https://mpra.ub.uni-muenchen.de/52587/10/MPRA_paper_52587.pdf
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    References listed on IDEAS

    as
    1. Anokhin, Sergey & Schulze, William S., 2009. "Entrepreneurship, innovation, and corruption," Journal of Business Venturing, Elsevier, vol. 24(5), pages 465-476, September.
    2. Laura de Dominicis & Raymond J.G.M. Florax & Henri L.F. de Groot, 2013. "Regional clusters of innovative activity in Europe: are social capital and geographical proximity key determinants?," Applied Economics, Taylor & Francis Journals, vol. 45(17), pages 2325-2335, June.
    3. Wang, Yuanyuan & You, Jing, 2012. "Corruption and firm growth: Evidence from China," China Economic Review, Elsevier, vol. 23(2), pages 415-433.
    4. Varsakelis, Nikos C., 2006. "Education, political institutions and innovative activity: A cross-country empirical investigation," Research Policy, Elsevier, vol. 35(7), pages 1083-1090, September.
    5. Jaffe, Adam B., 1989. "Characterizing the "technological position" of firms, with application to quantifying technological opportunity and research spillovers," Research Policy, Elsevier, vol. 18(2), pages 87-97, April.
    6. Beata K. Smarzynska & Shang-Jin Wei, 2000. "Corruption and Composition of Foreign Direct Investment: Firm-Level Evidence," NBER Working Papers 7969, National Bureau of Economic Research, Inc.
    7. Furman, Jeffrey L. & Porter, Michael E. & Stern, Scott, 2002. "The determinants of national innovative capacity," Research Policy, Elsevier, vol. 31(6), pages 899-933, August.
    8. Grande, Edgar & Peschke, Anke, 1999. "Transnational cooperation and policy networks in European science policy-making," Research Policy, Elsevier, vol. 28(1), pages 43-61, January.
    9. Chen, Yunling & Liu, Ming & Su, Jun, 2013. "Greasing the wheels of bank lending: Evidence from private firms in China," Journal of Banking & Finance, Elsevier, vol. 37(7), pages 2533-2545.
    10. Varsakelis, Nikos C., 2001. "The impact of patent protection, economy openness and national culture on R&D investment: a cross-country empirical investigation," Research Policy, Elsevier, vol. 30(7), pages 1059-1068, August.
    11. Acs, Zoltan J. & Anselin, Luc & Varga, Attila, 2002. "Patents and innovation counts as measures of regional production of new knowledge," Research Policy, Elsevier, vol. 31(7), pages 1069-1085, September.
    12. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
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    More about this item

    Keywords

    Foreign direct investment; Corruption; Innovation; Technology transfer;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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