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FDI and Innovation as Drivers of Export Behaviour: Firm-level Evidence from East Asia

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  • Wignaraja, Ganeshan

    (Office of Regional Economic Integration, Asian Development Bank)

Abstract

This paper examines the links between ownership, innovation and exporting in electronics firms in three late industrializing East Asian countries (China, Thailand and the Philippines) drawing on recent developments in applied international trade and innovation and learning. Technology-based approaches to trade offer a plausible explanation for firm-level exporting behavior. The econometric results (using probit) confirm the importance of foreign ownership and innovation in increasing the probability of exporting in electronics. Higher levels of skills, managers' education and capital also matter in China as well as accumulated experience in Thailand. Furthermore, a technology index composed of technical functions performed by firms emerges as a more robust indicator of innovation than the R&D to sales ratio. Accordingly, technological effort in electronics in these countries mostly focuses on assimilating and using imported technologies rather than formal R&D by specialized engineers.

Suggested Citation

  • Wignaraja, Ganeshan, 2008. "FDI and Innovation as Drivers of Export Behaviour: Firm-level Evidence from East Asia," MERIT Working Papers 2008-061, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2008061
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    File URL: https://www.merit.unu.edu/publications/wppdf/2008/wp2008-061.pdf
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    References listed on IDEAS

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    Cited by:

    1. Md Qamruzzaman & Tahar Tayachi & Ahmed Muneeb Mehta & Majid Ali, 2021. "Do International Capital Flows, Institutional Quality Matter for Innovation Output: The Mediating Role of Economic Policy Uncertainty," Journal of Open Innovation: Technology, Market, and Complexity, MDPI, Open Access Journal, vol. 7(2), pages 1-26, May.
    2. Trinh, Long, 2015. "Dynamics of innovation and internationalization among Vietnamese SMEs," MPRA Paper 68308, University Library of Munich, Germany, revised 26 Nov 2015.
    3. Trinh, Long Q., 2016. "Dynamics of Innovation and Internationalization among Small and Medium-Sized Enterprises in Viet Nam," ADBI Working Papers 580, Asian Development Bank Institute.
    4. Willem Thorbecke & Biswa N. Bhattacharyay, 2012. "Role of Production Networks in Sustaining and Rebalancing Asia's Growth," CESifo Working Paper Series 3896, CESifo.
    5. Kaliappa Kalirajan,, 2012. "Regional Cooperation towards Green Asia : Trade and Investment," Development Economics Working Papers 23291, East Asian Bureau of Economic Research.
    6. Lazaro, Dorothea C. & Wignaraja, Ganeshan & De Guzman, Genevieve, 2011. "Factors Affecting Use or Nonuse of Free Trade Agreements in the Philippines," Philippine Journal of Development PJD 2009 Vol. XXXVI No. 2, Philippine Institute for Development Studies.
    7. Kawai, Masahiro & Wignaraja, Ganeshan, 2011. "Asian FTAs: Trends, prospects and challenges," Journal of Asian Economics, Elsevier, vol. 22(1), pages 1-22, February.
    8. Wignaraja, Ganeshan & Lazaro, Dorothea & DeGuzman, Genevieve, 2010. "FTAs and Philippine Business: Evidence from Transport, Food, and Electronics Firms," ADBI Working Papers 185, Asian Development Bank Institute.
    9. Kaliappa Kalirajan & Venkatachalam Anbumozhi, 2014. "Regional Cooperation Toward Green Asia: Trade in Low Carbon Goods," The International Trade Journal, Taylor & Francis Journals, vol. 28(4), pages 344-362, October.
    10. Thorbecke, Willem & Salike, Nimesh, 2011. "Understanding Foreign Direct Investment in East Asia," ADBI Working Papers 290, Asian Development Bank Institute.
    11. Kalirajan, Kaliappa, 2012. "Regional cooperation towards green Asia: Trade in low carbon goods and services," Working Papers 249395, Australian National University, Centre for Climate Economics & Policy.
    12. Molina-Domene, María A. & Pietrobelli, Carlo, 2012. "Drivers of technological capabilities in developing countries: An econometric analysis of Argentina, Brazil and Chile," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 504-515.

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    More about this item

    Keywords

    foreign direct investment; innovation; technological capabilities; R&D; firm-level exports; electronics; East Asia; China; Thailand and the Philippines;
    All these keywords.

    JEL classification:

    • 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
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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