Innovation Oriented FDI as a way of Improving the National Competitiveness

Jovanka Damoska Sekuloska

Abstract


Innovation Oriented FDI as a Way of Improving the National Competitiveness

Jovanka Damoska Sekuloskaa

a University of Information Science and Technology St. Paul the Apostle, Partizanska bb, 6000 Ohrid, Republic of Macedonia

 

Purpose. The main purpose of the paper is to accent the importance of the quality of FDI as a way of stimulation and encouragement the innovation activities in the host country.  One of the benefits that come from the inward FDI is the possibility of transferring new technologies, but the most favorable benefits come from the possibility of using the inward location for development of new technologies.  The FDI could have positive contribution to the qualitative improvement in the production structure of inward economy and to the competitiveness if they establish or settle their R&D activities in the host economy.  The objectives of today’s national economies are to tend or to achieve innovation based competitiveness as the higher level of development, because it leads to higher productivity and it is one of the most effective ways to be more resistant to the turbulences and crises in todays’ economy. Using the regression analysis the paper is trying to verify the interdependence between the FDI and innovation in some target Western Balkans economies and Central European and Baltic economies.  Also through the comparative analyzes the paper tries to identify the differences in the structure of FDI and the impact to innovation activities among the analyzed economies.

Methodology. The paper is focused on regression and comparative analysis as statistical tools in explaining the importance of FDI on innovation and comparing a level of innovation based FDI in some target economies.

Results. The positive relationship between innovations oriented FDI an improvement of national competitiveness will be expressed through the measures for patent applications and export structure as the outputs of innovation.

The theoretical contribution. The paper indicates that the inward FDI can have positive effects to innovation activity in the host country, so its attempt is to test the spillover effects of FDI on innovation activity in the analysed economies.

Practical implications (if applicable). To accent the positive practices of some national economies in providing conditions and policies that attract more innovation oriented FDI.

Keywords: FDI, Innovation, Competitiveness

Paper type: Research paper


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