Inward foreign direct investment (FDI) and local innovative capacity

The purpose of this thesis is to examine the impact of various channels of technology spillovers on local innovative capacity at national and firm level. At national level, the thesis investigates the drivers of Malaysia‟s innovative capacity and the effect of international external sources on innov...

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Main Author: Abd Jaguli
Format: Default Thesis
Published: 2011
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Online Access:https://hdl.handle.net/2134/9082
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spelling rr-article-94966102011-01-01T00:00:00Z Inward foreign direct investment (FDI) and local innovative capacity Abd Jaguli (7197053) Other commerce, management, tourism and services not elsewhere classified MNCs Innovative capacity Foreign direct investment Knowledge spillovers and transfer Spillover channels Linkages Business and Management not elsewhere classified The purpose of this thesis is to examine the impact of various channels of technology spillovers on local innovative capacity at national and firm level. At national level, the thesis investigates the drivers of Malaysia‟s innovative capacity and the effect of international external sources on innovative capacity. At firm level, this thesis examines the impact of FDI on the innovation progress and studies whether multinational corporations (MNCs) can act as catalysts to stimulate local firms‟ innovation activities in Malaysia. Via a case study analysis at firm level, this thesis focuses on knowledge transfer through backward linkages established between MNCs and their local suppliers. Time series data analysis is conducted to provide empirical evidence of the effect of FDI spillovers on Malaysia‟s innovative capacity at national level. Additionally, a case-study approach is adopted to investigate the impact of vertical FDI spillovers on the innovation performance of local Malaysian firms. The key findings of the study reveal that export-related spillovers are positively associated with Malaysia‟s innovative capacity, whereas importrelated spillovers play a minor role in local innovation. The findings also indicate that there is no significant correlation between economic development and local innovation, which suggests that strong economic growth is not a necessary condition in order for Malaysia to enhance its local innovative capacity. The results suggest that there is strong evidence of the importance of foreign innovation activities to local innovative capacity at national level. In contrast, knowledge spillovers measured by FDI inflows have no significant impact on local innovative capacity. The results showed that FDI might be constrained by the fact that spillovers are more likely to take place through vertical relationships than horizontal relationships. At firm level, the study suggests that knowledge and technology can be diffused through high-quality and standard requirements imposed by MNCs, the assessment and feedback and training programmes offered by MNCs to local suppliers, as well as the production process itself. These results extend ii the existing literature on national innovative capacity and validate earlier theoretical and empirical research on vertical spillovers. The findings from the thesis also have important policy and managerial implications with regard to the impact of FDI on host developing countries. 2011-01-01T00:00:00Z Text Thesis 2134/9082 https://figshare.com/articles/thesis/Inward_foreign_direct_investment_FDI_and_local_innovative_capacity/9496610 CC BY-NC-ND 4.0
institution Loughborough University
collection Figshare
topic Other commerce, management, tourism and services not elsewhere classified
MNCs
Innovative capacity
Foreign direct investment
Knowledge spillovers and transfer
Spillover channels
Linkages
Business and Management not elsewhere classified
spellingShingle Other commerce, management, tourism and services not elsewhere classified
MNCs
Innovative capacity
Foreign direct investment
Knowledge spillovers and transfer
Spillover channels
Linkages
Business and Management not elsewhere classified
Abd Jaguli
Inward foreign direct investment (FDI) and local innovative capacity
description The purpose of this thesis is to examine the impact of various channels of technology spillovers on local innovative capacity at national and firm level. At national level, the thesis investigates the drivers of Malaysia‟s innovative capacity and the effect of international external sources on innovative capacity. At firm level, this thesis examines the impact of FDI on the innovation progress and studies whether multinational corporations (MNCs) can act as catalysts to stimulate local firms‟ innovation activities in Malaysia. Via a case study analysis at firm level, this thesis focuses on knowledge transfer through backward linkages established between MNCs and their local suppliers. Time series data analysis is conducted to provide empirical evidence of the effect of FDI spillovers on Malaysia‟s innovative capacity at national level. Additionally, a case-study approach is adopted to investigate the impact of vertical FDI spillovers on the innovation performance of local Malaysian firms. The key findings of the study reveal that export-related spillovers are positively associated with Malaysia‟s innovative capacity, whereas importrelated spillovers play a minor role in local innovation. The findings also indicate that there is no significant correlation between economic development and local innovation, which suggests that strong economic growth is not a necessary condition in order for Malaysia to enhance its local innovative capacity. The results suggest that there is strong evidence of the importance of foreign innovation activities to local innovative capacity at national level. In contrast, knowledge spillovers measured by FDI inflows have no significant impact on local innovative capacity. The results showed that FDI might be constrained by the fact that spillovers are more likely to take place through vertical relationships than horizontal relationships. At firm level, the study suggests that knowledge and technology can be diffused through high-quality and standard requirements imposed by MNCs, the assessment and feedback and training programmes offered by MNCs to local suppliers, as well as the production process itself. These results extend ii the existing literature on national innovative capacity and validate earlier theoretical and empirical research on vertical spillovers. The findings from the thesis also have important policy and managerial implications with regard to the impact of FDI on host developing countries.
format Default
Thesis
author Abd Jaguli
author_facet Abd Jaguli
author_sort Abd Jaguli (7197053)
title Inward foreign direct investment (FDI) and local innovative capacity
title_short Inward foreign direct investment (FDI) and local innovative capacity
title_full Inward foreign direct investment (FDI) and local innovative capacity
title_fullStr Inward foreign direct investment (FDI) and local innovative capacity
title_full_unstemmed Inward foreign direct investment (FDI) and local innovative capacity
title_sort inward foreign direct investment (fdi) and local innovative capacity
publishDate 2011
url https://hdl.handle.net/2134/9082
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