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Foreign multinationals and domestic innovation: intra-industry effects and firm heterogeneity

Crescenzi, Riccardo ORCID: 0000-0003-0465-9796, Gagliardi, Luisa and Iammarino, Simona ORCID: 0000-0001-9450-1700 (2015) Foreign multinationals and domestic innovation: intra-industry effects and firm heterogeneity. Research Policy, 44 (3). pp. 596-609. ISSN 0048-7333

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Identification Number: 10.1016/j.respol.2014.12.009


This paper looks at foreign Multinational Enterprises (MNEs) investing in the UK and at their impact on the innovation performance of domestic firms active in their same sector. By employing data on Foreign Direct Investments matched with firm-level information the paper develops a direct measure of capital inflows at a three-digit industry level. In order to capture innovation in both manufacturing and services the paper relies on a broader proxy for firm innovativeness based on the Community Innovation Survey (CIS). The results suggest that domestic firms active in sectors with greater investments by MNEs show a stronger innovative performance. However, the heterogeneity across domestic firms in terms of internationalization of both their market engagement and ownership structure is the main driver of this effect.

Item Type: Article
Official URL:
Additional Information: © 2014 Elsevier B.V.
Divisions: Geography & Environment
Spatial Economics Research Centre
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HC Economic History and Conditions
JEL classification: F - International Economics > F2 - International Factor Movements and International Business > F22 - International Migration
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes
Date Deposited: 20 May 2015 10:26
Last Modified: 20 Oct 2021 02:16
Projects: SSH-CT 2010-266959 (PICK-ME)
Funders: European Union Seventh Framework Programme FP7/2007-2013

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