The role of inward innovative foreign direct investments in the acquisition of foreign knowledge: the case of EU green and digital inventions
This paper aims to investigate the role of foreign direct investments (FDIs) in developing the local knowledge base of green and digital inventions in the European Union (EU). By drawing on recent research on the green and the digital transition, we investigate the extent to which inward innovative FDIs – i.e., both greenfield foreign investments and cross-border mergers and acquisitions (M&As) with an innovative content – can constitute a channel through which European regions are exposed to the external knowledge they need for the development of green and digital technologies. Our analysis relies on citation data about green and digital patent applications in the EU and uses this information in a gravity-modelling framework. We find that the knowledge base of green and digital technologies developed in EU metropolitan and NUTS 3 regions positively correlates with innovative inward FDIs. This positive correlation, which appears stronger with respect to greenfield FDIs, is driven by innovative investments originating from outside the EU in the case of digital technologies. By contrast, FDIs from both the EU and outside the EU affect the technological development of green technologies. These findings are consistent with the relative strength of the EU in the development of green technologies, and conversely with its relative weakness in the development of the more advanced digital technologies that have picked up in the last decade.
BELLO Michela;
CASTELLANI Davide;
DAMIOLI Giacomo;
MARIN Giovanni;
MONTRESOR Sandro;
2023-06-26
Publications Office of the European Union
JRC133591
978-92-68-04639-5 (online),
1831-9424 (online),
EUR 31562 EN,
OP KJ-NA-31-562-EN-N (online),
https://publications.jrc.ec.europa.eu/repository/handle/JRC133591,
10.2760/387171 (online),
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