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 | JEL Codes: A10, B22, C82, E00, E02, O10, O11, O30, O31, O32, O33, O34, O43
By Michael Potts
Martin Bronfenbrenner (1914-1997) was one of the last of a generation of generalist economists. His involvement in the U.S. Occupation of Japan changed his life and his career. This paper examines the mutually stabilizing relationship between his persona and his work in light of his experiences in Japan. Access to Bronfenbrenner’s previously restricted and unpublished autobiography archived in the Economists Papers Project at Duke University allows the author to reconstruct, from primary source material, some of the challenges faced by the individual, prewar-trained economist in navigating the postwar transformation of the economics discipline.
Advisor: E. Roy Weintraub | JEL Codes: B2, B31, N45, N95 | Tagged: U.S. Occupation of Japan, Economic Japanology: Martin Bronfenbrenner