Technological innovation in New European Union Markets
We analyze the role of innovation in the technological development of four new EU members: the Czech Republic, Hungary, Poland and Slovakia. For that purpose, we use a novel approach by modeling the empirical relationship between intra-industrial bilateral trade flows, which proxy the level of techn...
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| Other Authors: | , |
| Format: | workingPaper |
| Language: | eng |
| Published: |
2019
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10400.3/5051 |
| Country: | Portugal |
| Oai: | oai:repositorio.uac.pt:10400.3/5051 |
| Summary: | We analyze the role of innovation in the technological development of four new EU members: the Czech Republic, Hungary, Poland and Slovakia. For that purpose, we use a novel approach by modeling the empirical relationship between intra-industrial bilateral trade flows, which proxy the level of technological progress, and innovation expenditures within the context of a gravity model with a set of appropriate instrumental variables to account for the potential endogeneity of innovation to trade. We show that innovation efforts in high-tech industries exhibit a strong effect on the technological progress of the region and they are closely linked to foreign direct investment and multinationals. As foreign-owned subsidiaries become a part of the innovation systems and industrial structure of the host country they promote overall technological growth in the region. |
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