Globalization and Innovation in Emerging Markets
- (pp. 194-226)
Abstract
Globalization brings opportunities and pressures for domestic firms in emerging markets to innovate and improve their competitive position. Using data from 27 emerging market economies, we estimate the effects of foreign competition and linkages with foreign firms on innovation by domestic firms. We provide robust evidence of a positive relationship between foreign competition and innovation, broadly defined. The supply chain of multinational enterprises and trade are also important channels. There is no evidence for an inverted U relationship between innovation and foreign competition. Moreover, the relationship between globalization and innovation does not differ across the manufacturing and service sectors. (JEL F02, F23, M16, O33)Citation
Gorodnichenko, Yuriy, Jan Svejnar, and Katherine Terrell. 2010. "Globalization and Innovation in Emerging Markets." American Economic Journal: Macroeconomics, 2 (2): 194-226. DOI: 10.1257/mac.2.2.194Additional Materials
JEL Classification
- F02 International Economic Order
- F23 Multinational Firms; International Business
- M16 International Business Administration
- O33 Technological Change: Choices and Consequences; Diffusion Processes
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