Globalization and Technology Absorption in Europe and Central Asia: The Role of Trade, FDI, and Cross-border Knowledge FlowsInnovation and cross-border absorption of knowledge are central forces behind economic convergence and sustained growth. Absorption of technology is considered a necessary step to promote the development of human capital and the productive base, paving the way for innovations at the global knowledge frontier. Research and development, patents, trade, and foreign direct investment are major channels of technological absorption, allowing diffusion of new ideas and manufacturing best practices among countries and firms. These channels constitute the central focus of this study. This study uses patent databases, surveys of enterprises, and case studies to investigate how the presence of specific channels of absorption molds decision making about technology. Trade and FDI flows show considerable promise as catalysts for the region to upgrade its technology and near the global technology frontier. Econometric analysis using enterprise surveys from all Europe and Central Asia countries helps us understand the conditions and policies that induce firms to incorporate external knowledge and technology into their overall growth strategies. We find evidence of learning by exporting, underscoring the importance of trade as a driver of absorption. A case study of several manufacturing firms in Serbia complements this perspective, providing a detailed picture of the positive dynamics that are produced by FDI, particularly in terms of investment and risk-taking incentives that are critical for technology absorption. Examination of patent citations shows that cross-border knowledge flows remain weak. Consequently, science and innovation policies should foster greater integration of the region's substantial science and engineering resources with those of the rest of the world. These policies should encourage international collaboration and closer connection between the region's public sector R&D and global private sector efforts. |
Contents
Introduction | 1 |
Patents as Indicators of Technological Activity in the ECA Region | 7 |
The Links among Knowledge Absorption Trade and FDI | 23 |
Copyright | |
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access to finance access to international acquisition BEEPS 2002 Sample Bosnia and Herzegovina Bulgaria buyer certification and Internet changes coefficient coinvention companies competition competitors corporate governance costs Cross-Sectional Regressions Czech Republic Dependent Variable domestic Dummy variable equal ECA countries ECA patents ECA region economies effects employees enterprises export firm's firms in ECA foreign firms foreign investors foreign ownership global Governance index Greenfield investment growth Henkel human capital impact important increase industry Infrastructure index innovation input markets international connectedness international knowledge investment climate ISO certification logit manufacturing market incentives Merima MNCs multinational Nissal panel patent citations patent grants percent post-privatization product lines product or process R&D intensity regressions Romania Russia sector Serbia Seval significant significantly skills Slovenia strategic investor surveys Table tariff technology absorption U.S. patent Ukraine workers workforce World Bank Yes Yes Yes