Technological innovation in new EU markets

0390524 - NHU-C 2013 RIV US eng J - Journal Article
Uzagalieva, A. - Kočenda, Evžen - Menezes, A. G.
Technological innovation in new EU markets.
Emerging Markets Finance and Trade. Roč. 48, č. 5 (2012), s. 48-65. ISSN 1540-496X. E-ISSN 1558-0938
R&D Projects: GA ČR(CZ) GAP403/12/0080
Institutional support: PRVOUK-P23
Keywords : European Union * foreign direct investment * international trade
Subject RIV: AH - Economics
Impact factor: 1.190, year: 2012

We analyze the role of innovation in the technological development of four new members of the European Union: the Czech Republic, Hungary, Poland, and Slovakia. For that purpose, we use a novel approach, modeling the empirical relationship between intraindustrial bilateral trade flows, which represent the level of technological progress, and innovation expenditures within the context of a gravity model having a set of appropriate instrumental variables to account for the potential endogeneity of innovation to trade. We show that innovation efforts in high-tech industries exhibit a strong effect on the technological progress of the region and they are closely linked to foreign direct investment and multinationals. As foreign-owned subsidiaries become a part of the innovation systems and industrial structure of the host country, they promote overall technological growth in the region.
Permanent Link: http://hdl.handle.net/11104/0219423