Globalizing Innovation Globalizing Innovation State Institutions and Foreign Direct Investment in Emerging Economies Patrick J W Egan The MIT Press Cambridge, Massachusetts London, England © 2017 Massachusetts Institute of Technology All rights reserved No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the publisher This book was set in Palatino LT Std by Toppan Best-set Premedia Limited Printed and bound in the United States of America Library of Congress Cataloging-in-Publication Data Names: Egan, Patrick, 1978- author Title: Globalizing innovation : state institutions and foreign direct investment in emerging economies / Patrick J W Egan Description: Cambridge, MA : MIT Press, [2017] | Includes bibliographical references and index Identifiers: LCCN 2017019415 | ISBN 9780262037358 (hardcover : alk paper) Subjects: LCSH: International business enterprises Developing countries | Public institutions Classification: LCC HD62.4 E374 2017 | DDC 338.8/881724 dc23 LC record available at https://lccn.loc.gov/2017019415 10 9 8 7 6 5 4 3 2 1 For Diane and Chip Contents List of Figures ix List of Tables xi Preface xiii List of Abbreviations xix 1 Introduction Multinational Enterprise, Innovation, and Development: Theoretical Perspectives 21 Patterns of Innovation among Multinational Firms 59 The Determinants of Multinational Innovation in Emerging Economies 103 Innovation-Intensive FDI and Host Country Institutions 151 Chasing the Tiger: Is Ireland’s Experience with FDI a Model for Developing Countries? 189 7 Conclusion 227 Appendixes 245 References 263 Index 283 List of Figures Figure 2.1 State FDI strategies and possible outcomes 53 Figure 3.1 Sectoral evolution of FDI across sectors and countries, percentage of total FDI stock, 1980–2010 70 Figure 3.2 Evolution of FDI across countries, manufacturing subsectors as percentage of total manufacturing investment, 1980–2010 74 Figure 3.3 Evolution of FDI across countries, service subsectors as a percentage of total service investment, 1980–2010 76 Figure 3.4 US direct investment abroad, majority-owned nonbank foreign affiliates, R&D expenditures, 1999–2008 80 Figure 3.5 US direct investment abroad, majority-owned nonbank foreign affiliates, R&D expenditures, developing regions, 1999–2008 81 Figure 3.6 Relative R&D expenditures by US firms, state comparison 82 Figure 3.7 US foreign affiliates research and development expenditures, as a percentage of all US multinational R&D expenditures, 1999–2008 84 Figure 3.8 US foreign affiliates R&D expenditures, by region and sector as a percentage of sectoral value added, 1999–2008 86 Figure 3.9 Patenting activity by registration country, sending country, and broad sectoral category 88 Figure 3.10 Median R&D expenditure by decile of domestic material inputs, 2002–2005 firm surveys 97 Figure 3.11 Relationship between export intensity and R&D intensity, select countries, 2002–2005 firm surveys 99 Figure 3.12 Mean levels of exports and local sourcing by region and presence of local innovation, 2002–2005 firm surveys 100 Figure 5.1 Consistent and predictable governance and R&D intensity 183 Figure 6.1 Incidence of innovation among foreign-owned firms, 2008 CIS 206 Figure 6.2 Incidence of innovation among foreign-owned firms in manufacturing subsectors, 2008 CIS 207 Figure 6.3 Incidence of innovation linkages among information and communication firms, 2007 BERD 211 278 References Robock, Stefan 2005 How Will Third World Countries Welcome Foreign Direct Investment in the Twenty-First Century? 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Law & Society Review 42 (4): 805–832 Yew, Lee Kuan 2000 From Third World to First: The Singapore Story—1965–2000 1st ed New York: Harper Index Note: Page entries referring to figures are indicated with “f”; tables are indicated with “t.” Acemoglu, Daron, 41 Acha, Virginia, 77, 158, 238 Africa, 86–87 economic openness, 111 export industry, 100f Investment Climate Surveys, 163t R&D spending, 81f sectoral diversity, 126–127 Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs), 241–242 Agriculture, 123–124, 127, 128–129t Aitken, Brian, 93 Almaden lab, 2, Almeida, Rita, 112–113 Álvarez, Isabel, 157 Ambos, Björn, 79 Ambos, Tina, 79 Amsden, Alice, 93, 142 Argentina, manufacturing sector, 75 Arora, Ashish, 215 Asia, 80, 86, 100f, 163t See also East Asia Asiedu, Elizabeth, 107 Aylward, Anthony, 107 Baran, Paul, 157 Bargaining perspective, 43–45 Barnet, Richard, 24–25 Barro, Robert, 177 Barro-Lee educational attainment dataset, 108, 177 Barry, Frank, 205, 220 Bartlett, Christopher, 34, 64, 143 Beck, Nathaniel, 116 Behrman, Jack, 44, 154 Benoliel, Daniel, 133 Bettis, Richard, 228 Bilateral investment treaties (BITs), 56–57, 113–115, 118–119t, 120, 134t, 231 Blomström, Magnus, 92, 93 Brain drain, 21 Branstetter, Lee, 242 Brazil control and innovation, 142 education, 66 export industry, 99f FDI sectoral composition, 70f innovation indicators, 67t manufacturing sector, 74f, 75 patents, 87–89 R&D spending, 68, 82f, 83, 84, 85t sectoral diversity, 124 service industry, 76 Breznitz, Dan, 196–197, 201, 215, 218 Brunetti, Aymo, 109, 159 Business Enterprise Expenditure on R&D (BERD), 204, 206, 210, 220–222 Business Environment Risk Intelligence (BERI), 166, 227 Busse, Matthias, 49, 109, 159 Büthe, Tim, 114 Buyer vs producer driven chains, 37 Cahill, Brian, 204, 209 Canada, 45 Cantwell, John, 33, 34, 38, 62 Carballo, Jerónimo, 162 Cassiolato, Jose, 56, 62, 65, 82 Castellacci, Fulvio, 73, 239 Caves, Richard, 32, 92 284 Index Celtic tiger See Ireland Centralized vs decentralized innovation, 61–62, 64, 158 Central Statistics Office Cork, Ireland, 19, 195, 203 Centres for Science, Engineering and Technology (CSETs), 219 Centrifugal forces, 62, 66 Centripetal forces, 62, 65, 66 Chakrabarti, Avik, 168 Cheibub, José, 110, 180 Chemical manufacturing export of, 96t, 97 innovation and, 73–75 sectoral profile, 128–129t, 130–131 US R&D spending, 118–119t Chile, CORFU, 125–126 China, 41 anecdote of, 227–228 control and innovation, 142 export industry, 99f FDI and development, 81, 82–83 financial restrictions, 111–112 innovation indicators, 67t patents, 87–89 R&D spending, 68, 84, 85t, 98 Chinn and Ito de jure index of financial openness, 112 Community Innovation Survey (CIS), 13–14, 195, 204, 206, 209 Competition effects, 92 Cooper-Whelan study, 199 Corporate tax rate, 190, 200, 205, 219–220, 230–231 Correlation coefficient, 117 Corruption, 159 control of, 171–178 measures of, 110–111, 165–168 patents, 134t, 136 "Creative destruction," 60 Crowding out effect, 93 Culliton report, 202 Dachs, Bernhard, 72, 75, 101, 113 Damijan, Jože, 93, 144 Data, sources of, 13–14 Davidson, William, 156 Decentralization, 61–62, 64, 158 Democratic longevity measure, 110, 118–119t, 121, 148 Demonstration effects, 92 Desai, Mihir, 111 Developing countries, 21 See also Ireland efficiency and, 34 multinational firms in, 21 sectoral diversity, 124, 126–127 US R&D spending, 81f, 82 Development, 30–39 FDI, role of, 23–30 foreign firms and, 21–23 host country institutions and, 39–49 policy, host country, 49–57 Diffusion, 61 Dikova, Desislava, 156, 160 Dinopoulos, Elias, 242 Djankov, Simeon, 93 Doh, Jonathan, 46, 156–157 Doran, Justin, 204 Dunning, John host country institutions, 30, 154 OLI framework, 40, 155, 156, 158 organizational structures, 35 passive FDI-dependent strategy, 15, 25 on policy, 10 R&D spending, 145 Dutch disease dynamics, 130 East Asia, 25 export industry, 99–100 FDI and development, 79 Investment Climate Surveys, 163t manufacturing sector, 75 R&D spending, 68 sectoral diversity, 124 East Asian tiger phenomenon, 47 Ebersberger, Bernd, 101, 113 Economic Development (Whitaker), 198 Economic Development Board (EDB), 227–228 Economic openness, 111, 118–119t, 121, 148 Economist Intelligence Unit, 165 Eden, Lorraine, 44–45 Education and skill set, 176t, 177 host country, 49–50 in Ireland, 193, 194, 197, 210, 211–213f, 215–217 R&D determinants, 182t sectoral diversity and, 127 Electronics, 91, 95, 96t, 130–131, 199–200, 213 Elkins, Zachary, 114 Emerging economies, 103–149 alternate innovation indicators, 145–147 Index 285 American innovation patterns, 117–122 determinants, of innovation, 106–116 firm survey data, 137–145 overview of, 103–106 patent data, 131–137 sectoral heterogeneity, 123–131 Enterprise Ireland, 195, 202, 218, 219 Eolas, 217 Equations See models Europe See also Western Europe export industry, 100f FDI and development, 79 Investment Climate Surveys, 163t US R&D spending, 80 European Business Enterprise Expenditure (BERD), 13–14, 195 Evans, Peter, 42, 157, 197 Export processing zones (EPZs), 16, 26, 90, 125 Exports, 17 emerging economies, 125–131 FDI and development, 27–29, 168 incentives, 43–44 innovation and, 98–100 Ireland, 193–194, 199–200 R&D spending, 95–96 trade openness, 112–113 Externalized technology, 65 Fagerberg, Jan, 61, 112–113, 145 Fink, Philipp, 197, 209 Firm characteristics, market- vs efficiency-seeking, 11 Fitzgibbon, Michael, 197, 217 Flashcast, 1–3 Foley, Fritz, 111 Forbairt, 218 Foreign direct investment (FDI), 30–39, 56 approach to and data, 7–9 development and, 23–30 future issues, 240–243 host country institutions, 39–49 (see also Host country institutions) investment promotion policies, 12 in Ireland, 193–195, 203–204 (see also Ireland) in Kenya, 2–3 main argument (of book), 9–13 policy, host country, 49–57 policy implications, 237–240 pros and cons, 21–23 service industry, 76f theory, lessons in, 235–236 trends in, 69–78 Foreign linkage effects, 92 Forfás, 195, 202, 219 Frey, Bruno, 107, 108, 159 Future issues, 240–243 Future of the Multinational Enterprise, The (Buckley & Casson), 30 Gallup World Poll, 165 Gambardella, Alfonso, 215 Gandhi, Jennifer, 110, 180 Gastanaga, Victor, 111 GDP, 68, 168–169 developing countries, 126 emerging economies, 146–148 FDI and development, 107–108 in Ireland, 191 Ireland, 191 in Ireland, 194, 205 patents, 134–135t R&D determinants, 172–173t, 182t R&D spending, 128–129t trade openness, 171–175 US and, 112, 113 GDP per capita, 118–119t, 120 Generalized method of moments (GMM) framework, 122 Germany, 82–83, 87–89 Gerschenkron, Alexander, 42, 42n Ghoshal, Sumantra, 34, 64, 143 Giarratana, Marco, 201 Ginarte, Juan, 167–168 Giroud, Axèle, 91 Gleeson, Anne Marie, 210 Global Reach: The Power of the Multinational Corporation (Barnet & Muller), 24–25 Global value chain (GVC) framework, 36–37 Görg, Holger, 204, 210 Government stability See also host country institutions effectiveness measure, 164–165 innovation indicators, 146t multinational firms and, 49, 109–111, 121, 158–160 perception of, 179, 181 R&D spending, 118–119t, 182t, 183f Greenfield investment, 152, 184 Gross domestic expenditure on research and development (GERD), 68 Gross domestic product See GDP 286 Index Grosse, Robert, 44, 45 Gunnigle, Patrick, 216–217 Guzman, Andrew, 114 Haddad, Mona, 93 Hall, Bronwyn, 61 Hanson, Gordon, 93 Harrison, Ann, 93 Hausmann, Ricardo, 46 He, Qichun, 111–112 Hefeker, Carsten, 49, 159 Henisz, Witold, 49, 109 Hewitt-Dundas, Nola, 205, 206–207 Hines, James Jr., 111 Hoekman, Bernard, 93 Host country institutions, 39–49, 151–188, 228–229 conceptualization of, 153–154 conclusions, 184–186 control and innovation, 139–142 education and skill set, 49–50, 127, 176t, 177 firm entry modes and, 154–156 government type, 109–111, 118–119t, 121, 146t, 148 innovation and, 156–161 in Ireland, 197, 217–218 (see also Ireland) overview of, 151–153 R&D intensity, 178–180, 182t research methods and variables, 161–171 Hudson, John, 242 Hymer, Stephen, 32, 155 IBM Research Africa, 1–3 IDA Ireland, 193, 194, 196, 199–200, 201, 202, 212–215, 219 IMF, 28, 202 Implications, of book, 14–17 Import substitution industrialization (ISI), 28–29 Incentives, 46–47, 50–52, 190, 200, 205, 212–215, 219–220 India control and innovation, 142 education, 66 export industry, 99f innovation indicators, 67t R&D spending, 84, 85t Industrial Development Authority (IDA Ireland), 193, 194, 196, 199–200, 201, 202, 212–215, 219 Information technology (IT) in Ireland, 192, 200–201, 219–220 in Kenya, 1–3 revolution, 60–61, 63 sourcing and spending, 95, 96t Infrastructure, 108 Innovation, 4, 31–32 alternate innovation indicators, 145–147 components of, 61 conceptualization of, 60–62 distribution of, 65 in emerging economies see emerging economies exporting and, 98–99 hierarchy and, 11–12 host country institutions, 156–161 in Ireland see Ireland overview of, 9–13 patents see Patents patterns in see Patterns, of innovation policy and, 12 risks of, 46 Institute for Industrial Research and Standards (IIRS), 217 Institutional inertia, 47–48 Institutional Profiles Database, 165 Intellectual property, 48, 241–242 bilateral investment treaties, 115 corruption, 160 determinants, of innovation, 109–110 patent rights, 168 (see also patents) revenue source, 61 service innovation, 72 WIPO, 88–89, 133 Intellectual Property Index, 171, 175 Internalized technology, 65 International Centre for Settlement of Investment Disputes (ICSID), 113, 115 International Country Risk Guide (ICRG), 110–111, 136, 164, 166–167, 173t International Monetary Fund (IMF), 28, 202 Invention, 61 Investment Climate Surveys See World Bank’s Investment Climate Surveys Investment in Education (report), 215 Investment profiles, of countries, 10–11 Investment promotion agencies (IPAs), 237–238 Investment promotion policies, 12 Ireland, 25, 189–225 conclusions, 223–225 Index 287 development history, 198–203 development of FDI in, 195–198 education reform, 215–217 FDI characteristics, 203–204 funding patterns, 218–223 IDA role, 212–215 importance of, as example, 233–234 innovation-intensive FDI, 211–212 linkages, 209–211 overview of, 189–193 promotion, host institutions, 217–218 R&D spending, 82f, 204–209 role of FDI, 193–195 spillovers, 53 Irish Census of Industrial Production (CIP), 204 Irish Council for Science, Technology and Innovation (ICSTI), 219 Jaklič, Andreja, 93, 144 Japan, 25 patents, 87–89 R&D spending, 64 Jaspersen, Frederick, 107 Javorcik, Beata, 92, 93, 241 Jenkins, Barbara, 45 Jensen, Nathan, 109, 170–171 Joint ventures, 152, 159 Jun, K.W., 168 Kaplinsky, Raphael, 36 Katz, Jonathan, 116 Kaufmann, Daniel, 164 Kenya, 1–3 Kenyatta, Uhuru, Kindleberger, Charles, 31 Kisunko, Gregory, 159 Knox, A David, 107 Kobrin, Stephen, 45, 155, 228 Kogut, Bruce, 155 Kokko, Ari, 92, 93 Kosacoff, Bernardo, 37–38, 68 Kray, Aart, 164 Kurtz, Marcus, 29 Lall, Sanjaya, 33, 65, 82, 97 Latin America, 68 FDI and development, 23–24, 25, 79 Investment Climate Surveys, 163t manufacturing sector, 75 policy and, 29 Lee, Hanol, 108, 175, 177 Lee, Jong-Wha, 108, 175, 177 Legal system, 46 Lemass, Sean, 199 Li, Quan, 109, 170–171 Liberalization process, 48, 50–51 Licht, Georg, 72 Linkages BITs and, 57 importance and oversight of, 52–54 innovation trends, 89–101 in Ireland, 193, 195, 196–197, 201–202, 209–211, 212f, 213f, 217–218, 238–239, 243 likelihood of, 229–230 upgrading, 36–37 Logistics Performance Index (LPI), 167, 175 Lopéz, Andrés, 37–38, 68 Lundan, Sarianna, 156, 158 Maggio Dalibor, 242 Malaysia, innovation indicators, 67t Manpower Consultative Committee, 215 Manufacturing sector, 73–75 in Ireland, 205–206 patents, 88–89 R&D determinants, 140–141t, 176t sectoral diversity and, 127 sectoral profile, 128–129t, 130 US R&D spending, 118–119t Marín, Raquel, 157 Market- vs efficiency-seeking, 140–141t Martincus, Christian, 162 Mastruzzi, Massimo, 164 Matatus (public minibuses), 1–3 Mathematical models, 117, 139, 181, 249, 250, 253 McFetridge, Donald, 156 McGuire, David, 216–217 Mergers and acquisitions, 152, 184 Mexico, 86–87 control and innovation, 142 innovation indicators, 67t R&D spending, 68, 81f, 85t sectoral diversity, 124 spillovers, 93 Meyer, Klaus, 159, 160 Middle East, 100f, 163t Miles, Ian, 72 Milner, Helen, 114 Minea, Alexandru, 242 Mining, 24, 96t, 105, 125, 127, 206f 288 Index Moch, Dietmar, 72 Models, 117, 139, 181, 249, 250, 253 Modernization vs dependency theorists, 23–24 Montiel, Peter, 111 Moran, Theodore, 239 Morris, Mike, 36 Mudambi, Ram, 38 Müller, Ronald, 24–25 Multinational enterprise (MNE) labs, 102 Multinational firms, 30–39 See also Ireland embeddedness of see Spillovers FDI and development, 23–30 host country institutions and, 39–49, 154–156 (see also Host country institutions) innovation, history of, 62–69 introduction to, 21–23 main idea of, 9–13, 15 organizational structure of, 34–35, 38 patterns, innovation see Patterns, of innovation policy, host country, 49–57 workforce, 66–68 Nairobi, 1, Narula, Rajneesh, 15, 25, 30, 35, 47–48 National Board of Science and Technology (NBST), 217 National Bureau of Economic Research (NBER), 132–137 National Linkage Program, 202, 214 National Software Center (NSC), 218 National Software Directorate (NSD), 218 Natural resources emerging economies, 126–127, 129–130 emerging economies and, reliance on, 27 Nelson, Richard, 125–126 Neoclassical approach, 42, 235–236 Ng Pock Too, 227–228 North, Douglass, 10, 153–154 North American, R&D spending, 64 Nugent, Jeffrey, 111 O’Driscoll report, 202 Oetzel, Jennifer, 228 Office of Science and Technology (OST), 219 O'Hearn, Denis, 197, 209 O'Leary, Eoin, 204 O'Malley, E., 205, 206–207 Oneal, John, 109–110 Ordinary least squares (OLS), 116, 138, 169 Organization for Economic Cooperation and Development (OECD), 13–14, 64, 205, 215, 216 Ó Riain, Seán, 201, 202–203, 209–210, 223 Ornston, Darius, 197 Orthodox model, 50 Ownership, location, and internalization (OLI) framework, 40, 155, 156, 158 Oxley, Joanne, 48, 156, 161 Pagano, Alessandro, 201 Pandya, Sonal, 110 Papanastassiou, Marina, 35, 61, 91, 102, 144 Park, Walter, 167–168 Pashamova, Bistra, 111 Passive FDI-dependent strategy, 52, 53f Patents, 87–89, 131–137, 206–207, 208t, 230 Patterns, of innovation American innovation, 116–122 conceptualization of, 60–62 conclusions, 101–102 determinants of, 106–116 history of, multinational firms, 62–69 innovation indicators, 67t in Ireland, 218–223 multinational firms, 78–89 overview of, 59–60 sectoral heterogeneity, 123–131 spillovers and linkages, 89–101 trends in, recent, 69–78 Pauly, Louis, 79 Paus, Eva, 205 Pavitt, Keith, 73–74 Pearce, Robert, 35, 61, 91, 102, 144, 224 Pedrazzoli, Mara, 37–38, 68 Pharmaceuticals, 95, 96t, 97, 205–206 Poisson regression coefficients, 135 Policy, host country implications, 237–240 innovation and, 12, 49–57, 189–190 investment promotion, 12 in Ireland, 197, 198–203, 205 main idea of, 15, 228–229 trade openness, 28–29 Index 289 Political environment attractiveness of, 7, 10 risk and, 158–159 Political Risk Services (PRS) Group, 111, 164, 166–167 Population, 107, 176t, 182t Prais-Winsten coefficient, 117 Preferential trade agreements (PTAs), 114 Primary FDI, 69–70 "Process industries," 33 Productivity, 90–91, 204 Program for Research in Third-Level Institutions, 220 Programs in Advanced Technology (PATs), 217 Rahman, Aminur, 170–171 Reddy, Prasada, 34, 63, 65, 81 Regional product mandates (RPMs), 91 Reich, Simon, 79 Reinhart, Carmen, 111 Research and development (R&D) determinants of, 172–173t, 176t future issues, 240–243 innovation, determinants of, 106–116 innovation and spending, 68–73 innovation indicators, 67t intensity of, 178–180 Investment Climate Surveys, 163t in Ireland, 195, 197, 204–209, 219–222 in Kenya, 2–3 multinational firms, historical patterns, 62–66 policy implications, 237–240 productivity and, 91n sourcing and, 95–98 variation in, 68–69 Resnick, Adam, 109 Risk, minimization, 159, 166–167 Risk, political, 158, 183f, 228, 229 Rodrok, Dani, 42, 46 Rojec, Matija, 93, 144 Ronstadt, Robert, 33, 63 Roper, Stephen, 205, 206–207 Rose-Ackerman, Susan, 114 Ruane, Frances, 204, 210 Rugman, Alan, 46 Russia, 41 export industry, 99f FDI sectoral composition, 70f innovation indicators, 67t patents, 87–89 R&D spending, 68, 85t Schmiele, Anja, 107, 108, 241–242 Schneider, Friedrich, 159 Schrank, Andrew, 29 Schumpeter, Joseph, 60 Science Foundation Ireland (SFI), 195, 198, 217, 219 Scope, of book, 14–17 Secondary FDI, 69–70 Sectoral heterogeneity, 123–131 Security, in Kenya, 2–3 Segerstrom, Paul, 242 Service industry, 75–77 patents, 88–89 R&D determinants, 140–141t, 176t sectoral diversity and, 127 sectoral profile, 128–129t Shang, Xi, 204, 209 Siedschlag, Iulia, 204, 209 Simmons, Beth, 114, 231 Singapore, 25 anecdote of, 227–228 FDI sectoral composition, 70f, 71 innovation indicators, 67t manufacturing sector, 74f, 75 R&D spending, 68, 82, 85t service industry, 76 Singh, Satwinder, 155, 168 Slangen, Arjen, 48 South Africa export industry, 99f sectoral diversity, 124 South American, 86 South Korea, 25, 41 FDI sectoral composition, 70f, 71 innovation indicators, 67t manufacturing sector, 74f, 75 R&D spending, 68, 82, 84, 85t service industry, 76 Spillovers, 234, 238–239, 243 Ireland and, 53, 197–198, 204, 223–224 likelihood of, 229–230 trends in, 89–101 Standard of living, Ireland, 192 Strobl, Eric, 204 Sun, Ye, 111–112 Suppliers, in value chain, 90–91 Sutherland, Julie, 210 Sweet, Cassandra, 242 290 Index Taiwan, 25, 82, 85t, 124–125 Tariff-hopping, 230–231 Tavares, A., 52 Tax rate, 190, 200, 205, 219–220, 230–231 Technology firms, organizational structure of, 48 Technology transfer units (TTUs), 63 Teixeira, A., 52 Telebras, 76 Telesis report, 202 Terpstra, Vern, 33 Tertiary FDI, 69–70 Textile manufacturing, 73–75, 96t Theory, lessons in, 235–236 Thesis, 9–13 Time-series analysis, patents, 131–137 Tobin, Jennifer, 114 Torrisi, Salvatore, 201, 215 Trade openness, 29, 50–51, 111, 112–113, 134t, 148, 230–231 Trade-Related Aspects of Intellectual Property Rights (TRIPs), 56, 168 Trade-Related Investment Measures (TRIM), 55 Training effects, 92 Transparency International’s Corruption Perception Index, 167 Transportation equipment, 85, 86f, 106–107, 118–119t, 128–129t, 130–131 Trends See Patterns, of innovation Truncated miniature replicas (TMRs), 91 Tsai, Pan-Long, 107 Uğur, Ali, 204 Uncertainty See Risk UNESCO Institute for Statistics, 66, 68 United Nations Conference on Trade and Development (UNCTAD), 115 as data source, 13–14, 230 on global R&D spending, innovation patterns, 60 sectoral data, 70f, 73–74 spillovers, 94 US, FDI outflow, 79 United States firm survey data, 137–145 innovation patterns, 116–122 patent data, 131–137 patents, 87–89 R&D spending, 79–80, 81f, 82f, 85t sectoral heterogeneity, 123–131 US Bureau of Economic Analysis (BEA), 80, 104–105 American innovation patterns, methods, 116–117 American innovation patterns, results, 117–122 as data source, 13–14 determinants, of innovation, 106–116 innovation patterns, 60, 87 US Patent and Trademark Office (USPTO), 104–105, 132–137 Uruguay Round of the WTO, 55 Van Tulder, Rob, 48 Van Witteloostuijn, Arjen, 156, 160 Variables, 162–168, 182t Vernon, Raymond, 31 Vertical vs horizontal production, 32–33, 38, 113, 144–145 Von Tunzelmann, Nick, 77, 238 Vreeland, James, 110, 180 Wade, Robert, 124 Washington Consensus, 25 Watson lab, Wealth, 107–108 Weder, Beatrice, 109, 159 Wells, Louis, 21 Western Europe, 64, 87 Whitaker, Ken, 198 Wholly-owned subsidiaries, 152 Williamson, Oliver, 10, 33, 153 Wooldridge, Jeffrey, 116 Workforce, supply of, 66–68 See also Education World Bank Logistics Performance Index, 167 World Development Indicators, 66, 104–105, 143, 168–169 World Bank’s Investment Climate Surveys, 152–153 alternate innovation indicators, 145–147 as data source, 13–14, 232 host country institutions, 161–171 innovation patterns, 60, 137–145 linkages, 101 spillovers, 94–95 World Development Indicators (WDI), 66, 104–105, 143, 168–169 World Economic Forum Global Competitiveness Report, 165 Index 291 World Governance Indicators (WGI), 164–166, 170–175 World Intellectual Property Organization (WIPO), 88–89, 133, 136 World product mandates (WPMs), 38, 91, 144 World Trade Organization (WTO), 55, 241 Yackee, Jason, 114 Yew, Lee Kuan, 227–228 Zejan, Mario, 93 Zemin, Ziang, 227–228 Zenner, Marc, 228 Zou, Heng-Fu, 111–112 .. .Globalizing Innovation Globalizing Innovation State Institutions and Foreign Direct Investment in Emerging Economies Patrick J W Egan The MIT Press Cambridge, Massachusetts London, England... of Congress Cataloging -in- Publication Data Names: Egan, Patrick, 1978- author Title: Globalizing innovation : state institutions and foreign direct investment in emerging economies / Patrick... trends and influences, both within states and at the international level The Argument in Brief Multinational firms are pulled in different directions when considering how to invest in emerging economies