What Fosters Innovation? A CrossSectional Panel Approach to Assessing the Impact of Cross Border Investment and Globalization on Patenting Across Global Economies
By Michael Dessau and Nicholas Vega
This study considers the impact of foreign direct investment (FDI) on innovation in high income, uppermiddle income and lowermiddle income countries. Innovation matters because it is a critical factor for economic growth. In a panel setting, this study assesses the degree to which FDI functions as a vehicle for innovation as proxied by scaled local resident patent applications. This study considers research and development (R&D), domestic savings, imports and exports, and quality of governance as factors which could also impact the effectiveness of FDI on innovation. Our results suggest FDI is most effective as inward direct investment in countries outside the technological frontier possessing adequate existing domestic investment capital and R&D spending to convert foreign investment capital and technological spillover into innovation. Nonetheless, FDI was not a consistent indicator for innovation; rather, the most consistent indicators across this study were R&D and domestic savings. Differences amongst income groups are highlighted as well as their varying responses to our array of causal factors.
Advisor: Lori Leachman, Grace Kim, Michelle Connolly | JEL Codes: A10, B22, C82, E00, E02, O10, O11, O30, O31, O32, O33, O34, O43
“Winner-Take-All Economics” Professional Inquiry and Public Discourse on Material Inequality
By Jonathan Pryor
What can account for the failure of economists to extend a firm guiding hand into the public discourse on material inequality in contemporary America? This paper reviews historical and modern economic literature and then extends its focus to the debates in the public sector, private opinion, “think tanks,” the news media, the private sector, special interest groups, and popular culture. The intractable social, political and economic complexity of the problem and the influence of competing interests deter attempts at economic interpretation. Economists should respond to the public need by devoting greater attention to descriptive and prescriptive analyses, developed with an appreciation of the competing interests and activities of the various sectors that must accept any response.
Advisor: Craufurd Goodwin | JEL Codes: A11, A13, B12, B13, B14, B15 | Tagged: Economic Inequality, Income Inequality, Wealth Inequality
