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)
Gorodnichenko, Yuriy, Jan Svejnar, and Katherine Terrell.
"Globalization and Innovation in Emerging Markets."
American Economic Journal: Macroeconomics,
International Economic Order
Multinational Firms; International Business
International Business Administration
Technological Change: Choices and Consequences; Diffusion Processes