On the innovativeness of foreign affiliates: Evidence from companies in The Netherlands

Sadowski, Bert M.; Sadowski-Rasters, Gaby

doi:10.1016/j.respol.2006.01.003

Cited by 74 publications

(53 citation statements)

References 39 publications

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“…Various studies have evaluated differences in innovation between foreign-owned and domestically owned firms empirically (Dachs et al, 2008;Ebersberger et al, 2005;Sadowski and Sadowski-Rasters, 2006). These studies find a higher innovation output of foreign-owned firms in terms of sales from new products after controlling for firm characteristics.…”

Section: Innovation Employment Growth and Foreign Ownershipmentioning

confidence: 99%

Innovation, Employment Growth, and Foreign Ownership of Firms - A European Perspective

Dachs

Peters

2013

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Non-Technical SummarySubsidiaries of foreign multinational enterprises (MNEs) are among the top performers of research, development and innovation in many EU and non-EU countries. In some smallEuropean countries -examples are Austria, Belgium, the Czech Republic, Hungary or Ireland -foreign-owned firms even account for more than 50% of total business expenditure for R&D.The high relevance of foreign ownership for technology and innovation policy calls for a sound understanding of the innovation behaviour of foreign-owned firms and its impact on economic performance. Using the theoretical model of Harrison, Jaumandreu, Mairesse and Peters (2008), this paper contributes to the existing literature by disentangling sources of employment growth by ownership, and it particularly investigates the role product and process innovation play for employment in foreign-owned and domestically owned firms. We examine the link between innovation and employment using a large data set (Community Innovation Surveys CIS4) of more than 64,500 firms from 16 European countries.Previous studies have shown that innovation and technology are key dimensions in which foreign-owned and domestically owned firms differ. There is ample evidence that MNEs tend to possess superior firm-specific assets, operate more frequently in R&D-intensive sectors and employ more highly-qualified staff than domestically owned firms. Both groups also differ in their capabilities to create new products and in their ability to successfully introduce innovations to the market. Our analyses enlighten that these differences, in turn, lead to differences in employment creation and destruction from innovation between the two groups.We find that foreign-owned firms experience higher employment losses than domestically owned firms due to general (non-innovation related) productivity improvements and in manufacturing also partly due to process innovation. A likely explanation for this finding is that foreign-owned firms that introduce new processes adopt superior technologies of their parent companies. In addition and in contrast to domestic firms, most foreign-owned firms are able to produce new products with a higher efficiency than existing products (except for European FOF in manufacturing). These larger productivity gains might be worrying as they imply that foreign-owned firms would need to create much more jobs with product innovation and existing products to meet the employment growth rate of domestically owned f...

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Section: Innovation Employment Growth and Foreign Ownershipmentioning

confidence: 99%

Innovation, Employment Growth, and Foreign Ownership of Firms - A European Perspective

Dachs

Peters

2013

SSRN Journal

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“…Guerrieri and Pietrobelli (2004) found that inter-firm and inter-institution linkages need to be built to provide local SMEs (Small and Medium Enterprises) with the necessary externalities to cope with the dual challenge of knowledge creation and internationalization. Sadowski and van Beers (2003) examined the impact of foreign affiliates on product innovations and found out that foreign affiliates have a positive effect. Guellec and de la Potterie (2001) suggested that there is an increasing trend in the "internationalization of the technology" among OECD countries.…”

Section: Innovation and Internationalizationmentioning

confidence: 99%

Exploring relationships among internationalization, choice for research and development approach and technology source and resulting innovation intensity: Case of a transition country Croatia

Dabić¹,

Daim

Aralica

et al. 2012

The Journal of High Technology Management Research

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“…Once they control for firm and sector characteristics, multinational and domestic firms differ only in their innovation strategy but not in their innovation intensity. Sadowski and van Beers (2003) find that multinational affiliates in the Netherlands are more likely to introduce new products than domestic firms, but that there is no difference in the propensity to introduce drastic innovations. Griffith et al (2004) compare the R&D intensities of foreign-owned firms, multinationals with domestic headquarters and purely domestic firms across sectors.…”

Section: Previous Researchmentioning

confidence: 82%

The Impact of FDI on Innovation in Target Firms

Stiebale

Reize

2008

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The working papers published in the Series constitute work in progress circulated to stimulate discussion and critical comments. Views expressed represent exclusively the authors' own opinions and do not necessarily reflect those of the editors. Terms of use: Documents in The Impact of FDI on Innovation in Target FirmsAbstract This paper contributes to the ongoing debate on the welfare effects of foreign direct investment by investigating the effects of cross-border mergers and acquisitions on innovation activities in target firms. The empirical analysis is based on survey and ownership data for a large sample of small-and mediumsized German firms. After controlling for endogeneity and selection bias, it is found that foreign takeovers have a large negative impact on the propensity to perform innovation activities and a negative impact on average R&D expenditures in innovative firms. Furthermore, innovation output, measured as the share of sales from product innovations is not significantly affected by a foreign takeover for a given amount of innovation efforts. Hence, the estimation results do not show any evidence of significant technology spillovers through foreign direct investment in form of a higher innovation success.JEL Classification: D21, F23, G34, C31, O31, O33

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On the innovativeness of foreign affiliates: Evidence from companies in The Netherlands

Cited by 74 publications

References 39 publications

Innovation, Employment Growth, and Foreign Ownership of Firms - A European Perspective

Innovation, Employment Growth, and Foreign Ownership of Firms - A European Perspective

Exploring relationships among internationalization, choice for research and development approach and technology source and resulting innovation intensity: Case of a transition country Croatia

The Impact of FDI on Innovation in Target Firms

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