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FALK EFFECTS OF FOREIGN OWNERSHIP ON INNOVATION ACTIVITIES 1 EFFECTS OF FOREIGN OWNERSHIP ON INNOVATION ACTIVITIES: EMPIRICAL EVIDENCE FOR TWELVE EUROPEAN COUNTRIES
| Citations: | 2 - 0 self |
BibTeX
@MISC{Falk_falkeffects,
author = {Martin Falk},
title = {FALK EFFECTS OF FOREIGN OWNERSHIP ON INNOVATION ACTIVITIES 1 EFFECTS OF FOREIGN OWNERSHIP ON INNOVATION ACTIVITIES: EMPIRICAL EVIDENCE FOR TWELVE EUROPEAN COUNTRIES},
year = {}
}
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Abstract
In the present study we investigate the relationship between foreign ownership and innovation activities using the firm-level data of the third Community Innovation Survey (CIS) covering twelve European countries. Probit estimates based on 28,000 firms observations show that foreign-owned firms are more innovative than domestic firms, particularly in the New EU Member States. However, results from the Blinder-Oaxaca decomposition of the differences in the percentage of innovating firms between foreign-owned and domestic firms reveals that the differences are mainly due to the different firm characteristics rather than the differences in coefficients. In particular, the dominance of foreign-owned firms in the largest firm size group is the main factor contributing to the gap in the percentage of innovators between foreign-owned firms and domestic firms. Furthermore, using the fractional logit model, we find that in the New EU Member states, foreign owner-ship has a positive and significant impact on the share of market novelties as well as on the share of new products in turnover. In this case, the results from the Blinder-Oaxaca decomposition analysis indicate that the ownership difference in the share of innovative sales is not due to the differences in the observed firms ’ characteristics.
Keyphrases
effect foreign ownership innovation activity empirical evidence twelve european country foreign-owned firm domestic firm new eu member state third community innovation survey fractional logit model ownership difference new product significant impact firm observation main factor foreign ownership different firm characteristic blinder-oaxaca decomposition analysis foreign owner-ship present study innovation activity twelve european country blinder-oaxaca decomposition domestic firm reveals innovative sale probit estimate market novelty observed firm characteristic firm size group firm-level data
