When the rain comes, don’t stay at home! Regional innovation and FDI in the aftermath of the Great Recession

Crescenzi, Riccardo ORCID: 0000-0003-0465-9796 and Ganau, Roberto (2025) When the rain comes, don’t stay at home! Regional innovation and FDI in the aftermath of the Great Recession. Regional Studies, 59 (1). ISSN 0034-3404

Text (Crescenzi and Ganau 2025 Regional Studies FINAL ACCEPTED VERSION (002)) - Accepted Version Available under License Creative Commons Attribution. Download (1MB)

Abstract

Global connectivity is necessary for innovation to thrive. However, in response to external shocks, economies reduce external exposure and focus resources on internal markets. This closure is in contrast to the need for innovative solutions for recovery. We explore this paradox by looking at regional innovation in the United States in the aftermath of the Great Recession. We compare foreign direct investment (FDI) with similar domestic, inter-state investment to assess whether a ‘local innovation premium’ is associated with global connectivity vis-à-vis domestic linkages. We show that what matters for post-crisis innovation is active internationalisation through outward FDI and congruence in technological capabilities between connected territories.

Item Type:	Article
Additional Information:	© 2025 Regional Studies Association
Divisions:	Geography and Environment
Subjects:	H Social Sciences > HB Economic Theory
JEL classification:	F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O30 - General O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O19 - International Linkages to Development; Role of International Organizations O - Economic Development, Technological Change, and Growth > O5 - Economywide Country Studies > O51 - U.S.; Canada R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade
Date Deposited:	16 May 2025 13:27
Last Modified:	16 Jun 2025 09:45
URI:	http://eprints.lse.ac.uk/id/eprint/128136

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