Transcript Diapositiva 1 - Globelics Academy

4th PH.D. SCHOOL ON INNOVATION AND ECONOMIC DEVELOPMENT
GLOBELICS ACADEMY, LISBON, 2007
THE ROLE OF NATIONAL SYSTEMS OF INNOVATION
FOR FDI IN DEVELOPING COUNTRIES
CHIARA FRANCO
[email protected]
Ph.D. in Law and Economics, University of Bologna
AIM OF THE PAPER
ANALYSIS OF THE WAY NSI IN A DEVELOPING
CONTEXT PLAY A ROLE IN ATTRACTING FDI
AND ABSORBING THEIR SPILLOVER EFFECTS
SPECIFIC RESEARCH QUESTION
WHAT ARE THE INSTITUTIONS AND ORGANIZATIONS
THAT INSIDE THE NSI FRAMEWORK ARE THE MOST
IMPORTANT FOR THE INFLUENCE OF THE FDI INFLOWS,
THE AMOUNT OF TECHNOLOGY TRANSFERRED AND THE
ABSORPTION OF THEIR INDIRECT EFFECTS (SPILLOVER)?
METHOD
 REVIEW OF THE LITERATURE ON NSI IN DEVELOPING COUNTRIES AND
ON THE RELATIONSHIP BETWEEN FDI AND INSTITUTIONS
 EMPIRICAL APPLICATION THROUGH WORLDBANK DATABASE (KAM)
EXTERNAL SOURCES: FDI
FDI inflows towards developing countries are regularly rising
800 000
700 000
600 000
500 000
Nor t h A mer i ca
E ur ope
400 000
Devel opi ng economi es
Japan
300 000
200 000
Source: World Investment
Report (2006)
100 000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
EXTERNAL SOURCES: FDI/2
Relevant economic weight for their economies (FDI stock as % of
GDP)
40,00
35,00
30,00
25,00
Europe
North America
20,00
Japan
Developing economies
15,00
10,00
5,00
Source: World Investment
Report (2006)
0,00
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
STRUCTURE OF THE PAPER
1.
CRITICAL REVIEW OF SOME PAPERS WHERE THE
CONCEPT OF NSI IS APPLIED TO A DEVELOPING
CONTEXT
2.
SUMMARY OF THE MAIN RESULTS OF THE FDI
SPILLOVER LITERATURE FOCUSING THE ATTENTION
ON THE INSTITUTIONAL CONTEXT
3.
IDENTIFICATION OF INSTITUTIONS AND
ORGANIZATIONS (INSIDE THE FRAMEWORK OF NSI)
THAT ARE CRUCIAL FOR FDI
4.
EMPIRICAL APPLICATION
1.NSI IN DEVELOPING COUNTRIES
AIM: FIND OUT WHETHER IN WHAT WAY THE ROLE PLAYED BY
FOREIGN SOURCES IS TAKEN INTO ACCOUNT
A. THEORETICAL AND METHODOLOGICAL ISSUES OF NSI
LITERATURE RELEVANT FOR DEVELOPING COUNTRIES
B. CRITICAL REVIEW OF STUDIES RELATED TO THE
CONCEPT OF NSI IN DEVELOPING COUNTRIES
A. METHODOLOGICAL AND THEORETICAL ISSUES
 NSI literature adopts a SYSTEMIC APPROACH towards innovation
Firms do not innovate alone but they are part of a complex environment
where institutions and organizations shape and guide their innovative efforts
(Edquist 2004; Narula 2004)
 A lot of definitions: Freeman (1987), Lundvall (1992), Nelson and
Rosenberg (1993), Metcalfe (1995)….
COMMON POINTS:
• Innovation process in a developed context
• Important role given to linkages
• Identification of the main functions: produce, use and diffuse innovations
RELEVANCE FOR DEVELOPING COUNTRIES
Innovation in developing countries is of different
nature
•
Both institutions and organizations can be missing or
inappropriate and the interactions with firms may be
missing as well
•
•
Absorption function
B. CRITICAL REVIEW OF STUDIES RELATED TO THE
CONCEPT OF NSI IN DEVELOPING COUNTRIES
(Viotti, 2001;Mathews 2001; Wong 1999; Lall and Pietrobelli
2003; Arocena and Sutz 1999; Gu 1999; Edquist 2001; OyelaranOyeyinka 2005; Intarakamnerd 2002)
COMMON POINTS
- Broad approach adopted
- NSI as an ex-ante concept
- Importance of firm interaction with other non firm actors
(universities, standard setting agencies, research institutes, private
foundations, financing organisations, schools, government agencies)
- Importance of the effectiveness in learning
Absorption of foreign sources of technology: function and
the institutional set up concerned with this function not
properly identified
Exceptions:
Lall and Pietrobelli (2003): Sub-Saharan Africa;
“Even countries that import all their technology have to undertake significant,
costly and risky effort to use the technology efficiently (National Technological
System)”
Viotti (2001): comparison between Brazil and South Korea;
“National Learning Systems should be centered in the activities, institutions,
and relationships, associated to learning, rather than to innovation.
Absorption and incremental innovation should, therefore, be the main focuses
of studies of NLS”
Edquist (2001): System of Innovation for Development;
“for developing countries the generation of technological capability is primarily a
matter of absorbing products and processes developed in other countries and
deepening their knowledge about them over time”
2. FDI AND SPILLOVER PROCESS
AIM: FIND OUT WHETHER AND IN WHAT WAY THE
INSTITUTIONAL CONTEXT IS TAKEN INTO ACCOUNT IN
THE FDI LITERATURE
A.
SUMMARY OF THE RESULTS OF SPILLOVER
LITERATURE
B.
FOCUS ON THE RELATIONSHIP BETWEEN FDI AND
INSTITUTIONS
A. SUMMARY OF THE RESULTS OF THE FDI
SPILLOVER LITERATURE
RESULTS OF THE EMPIRICAL LITERATURE ARE MIXED BUT:
FOR DEVELOPING COUNTRIES INTERINDUSTRY SPILLOVER ARE USUALLY
GREATER THAN INTRAINDUSTRYSPILLOVER (BLALOCK 2004, SMARZYNSKA
2002, KUGLER 2006) BECAUSE OF THE BACKWARD LINKAGE EFFECTS
HOWEVER ALSO IN THIS CASE THERE CAN BE NEGATIVE RESULTS:
Yudeva et al. (2003) for Russia
Merlevede and Schoors (2005) for Romania
Sasidharan (2006) for India
It is due to the fact that the positive results are not automatic consequences
of the presence of Multinational Enterprises (MNEs) but they have to be
accompanied by significant efforts of local firms in term of ABSORPTIVE
CAPACITIES.
LITERATURE GAP: ROLE OF INSTITUTIONS
MY PERSPECTIVE: THEY ARE IMPORTANT IN AN INDIRECT WAY BY
HELPING FIRMS IN BUILDING GREATER ABSORPTIVE CAPACITIES
• HIGHER POSSIBILITY TO QUALIFY AS A SUPPLIER, HIGHER AMOUNT OF FDI
INFLOWS
• HIGHER POSSIBILITY TO TAKE ADVANTAGE OF FDI SPILLOVER WHATEVER IS
THE CHANNEL CONSIDERED
NON FIRM SECTOR IMPORTANT
FOR TWO REASONS (Narula
2004):
• TO PROVIDE SKILLED AND
EDUCATED WORKFORCE
EDUCATION
• TO PROVIDE A SORT OF R&D
INFRASTRUCTURE
(UNIVERSITIES, PUBLIC
RESEARCH INSTITUTE) TO
DIRECT TECHNOLOGY
STRATEGY
R&D
CAPABILITIES
B. FDI AND INSTITUTIONS
IN THE LITERATURE (SEE BLONIGEN 2005 FOR A SURVEY)
CONSIDERED ONLY:
• LEGAL AND POLITICAL INFRASTRUCTURE OR MACROECONOMIC
ENVIRONMENT
(tax systems, trade protection, easiness to create a company, lack of corruption,
security of property rights, transparency, contract law)
• ANALYSIS WITH RESPECT TO LOCATION CHOICE NOT LINKED WITH
THE TYPE OF FDI AND MOTIVATIONS
LITERATURE GAP
NOT CONSIDERED THOSE INSTITUTIONS THAT CAN STRENGTHEN THE
INNOVATIVE CAPACITY AT THE FIRM AND AT THE COUNTRY LEVEL
This may influence the flow of FDI and the amount of technology transferred.
Exception: IPR regime
Influence the composition of FDI
Maskus (2004), Smarzynska (2004)
Lall (2003): the need of a proper IPR regime varies by level of
development
3. NSI FRAMEWORK (broad definition)
Oyelaran-Oyeyinka (2005)
•
Political and legal structures
•
Basic and high-tech infrastructure
•
Science and technological knowledge base
•
Financial and incentive structure
POLITICAL AND
LEGAL
INFRASTRUCTURE
SCIENCE AND
TECHNOLOGICAL
KNOWLEDGE
BASE
FIRM
R&D
CAPABILITIES
EDUCATION
FINANCIAL AND
INCENTIVE
INFRASTRUCUTRE
IPR REGIME
BASIC AND
HIGH TECH
INFRASTRUCTURE
4. EMPIRICAL APPLICATION
AIM: TO FIND OUT WHETHER AND TO WHAT EXTENT THE
INSTITUTION AND ORGANIZATIONS IDENTIFIED IN THE
PREVIOUS
SECTIONS
FULFIL
THEIR
FUNCTION
(QUANTIFICATION OF NSI)
ANALYSIS OF CORRELATION MATRIX
DATABASE USED: Knowledge Assessment Methodology
DATABASE (WORLD BANK)
30 COUNTRIES SELECTED BY GEOGRAPHICAL AREA
SOUTH AMERICA
SUB-SAHARAN AFRICA
ASIA
Argentina
Angola
Bangladesh
Brazil
Botswana
China
Bolivia
Cameroon
Hong Kong
Chile
Cote d’Ivore
India
Colombia
Ghana
Malaysia
Ecuador
Kenya
Pakistan
Paraguay
Sierra Leone
Singapore
Perù
Uganda
Thailand
Uruguay
Tanzania
Vietnam
Venezuela
Zimbabwe
32 VARIABLES SELECTED ACCORDING TO THE NSI
FRAMEWORK
Political and legal
infrastructure
Scientific and technological knowledge
base
Researchers in R&D, 2004
Intellectual Property Protection, 2006
Regulatory Quality, 2005
Science and Engineering Enrollment Ratio, 2004
Rule of Law, 2005
Gross tertiary enrollment, 2004
Government Effectiveness, 2005
Professional and Technical Workers as % of the
Labor Force, 2004
Control of Corruption, 2005
Financial and incentive
infrastrucuture
Intensity of Local Competition,
2006
Domestic Credit to Private Sector
(% of GDP), 2005
Cost to register a business % of
GNI per capita, 2005
Availability of Venture Capital, 2006
Science Enrollment Ratio, 2004
Total Expenditure for R&D as % of GDP, 2004
Scientific and Technical Journal Articles, 2003
Patent Applications Granted by the USPTO, average
for 2001-05
High-Technology Exports as % of Manufactured
Exports, 2004
Basic and high-tech infrastructure
Telephone Mainlines Per 1,000 People, 2004
Internet Users Per 1,000 people, 2004
ICT Expenditure as % of GDP
ANALYSIS OF THE CORRELATION MATRIX (FDI INFLOWS AS
%GDP,2000-2004 AVERAGE)
Scientific and technological knowledge
base
Political and legal infrastructure
Researchers in R&D, 2004 -0,09
Intellectual Property Protection (2006) 0,35
Science and Engineering Enrollment Ratio, 2004 0,1
Regulatory Quality, 2005 0,86
Science Enrollment Ratio, 2004 -0.02
Rule of Law, 2005 0,853
Gross tertiary enrollment, 2004 0,04
Government Effectiveness, 2005 0,917
Total Expenditure for R&D as % of GDP,
2004 0,403
Control of Corruption, 2005 0,82
Financial and incentive
infrastrucuture
Intensity of Local Competition, 2006 0,13
Domestic Credit to Private Sector (% of GDP),
2005 0,33
Cost to register a business % of GNI per
capita, 2005 -0,18
Availability of Venture Capital, 2006, 0,33
Scientific and Technical Journal Articles, 2003, 0,53
Patent Applications Granted by the USPTO, average
for 2001-05 0,241
Public Spending on Education as % of GDP,
2003 0,04
Basic and high-tech infrastructure
Telephone Mainlines Per 1,000 People, 2004 0,55
Internet Users Per 1,000 people, 2004, 0,43
ICT Expenditure as % of GDP 0,24
RESULTS
LOW CORRELATION WITH:
• R&D RESEARCHERS
• GROSS TERTIARY ENROLLMENT
FDI MOTIVATIONS
• SCIENCE AND ENGINEERING
ENROLLMENT RATIO
• PUBLIC SPENDING ON EDUCATION
• ICT EXPENDITURE
FIRM LEVEL TECHNOLOGY
ABSORPTION (0,12)
INSTITUTIONS AND
ORGANIZATIONS OF NSI
NOT EFFECTIVE
ANALYSIS OF THE CORRELATION MATRIX BY COUNTRY
GROUPINGS
SUB-SAHARAN
AFRICA
NEGATIVE CORRELATION
WITH ALL VARIABLES
ONLY SIGNIFICANT
CORRELATION ARE
WITH:
• BASIC
INFRASTRUCTURE
• POLITICAL AND LEGAL
INFRASTRUCTURE BUT
NOT IPR (-0,35)
SOUTH AMERICA
ASIA
HIGH POSITIVE
CORRELATION WITH:
HIGH POSITIVE
CORRELATION
WITH
POLITICAL AND LEGAL
INFRASTRUCTURE BUT
NOT IPR (-0,002)
BASIC INFRASTRUCTURE
BUT NOT HIGH-TECH
POSITIVE WITH
SCIENTIFIC AND
TECHNOLOGICAL BASE
BUT NOT RESEARCHERS
IN R&D AND SCIENTIFIC
AND TECHNICAL
JOURNAL
ALL VARIABLE
ESPECIALLY
IPR (0,7)
SCIENTIFIC AND
TECHNICAL
JOURNAL (0,8)
ANALYSIS OF THE CORRELATION MATRIX (FIRM LEVEL
TECHNOLOGY ABSORPTION, 2004)
Political and legal infrastructure
Intellectual Property Protection (2006) 0,72
Regulatory Quality, 2005 0,58
Rule of Law, 2005 0,133
Government Effectiveness, 2005 0,432
Scientific and technological
knowledge base
Researchers in R&D, 2004 0,66
Science and Engineering Enrollment Ratio, 2004 0,42
Science Enrollment Ratio, 2004 0,16
Gross tertiary enrollment, 2004 0,322
Control of Corruption, 2005 0,193
Professional and Technical Workers as % of the Labor
Force -0,13
Financial and incentive
infrastrucuture
Total Expenditure for R&D as % of GDP, 2004 0,577
Intensity of Local Competition, 2006
0,78
Patent Applications Granted by the USPTO, average for
2001-05 0,57
Domestic Credit to Private Sector (% of
GDP), 2005 0,33
Public Spending on Education as % of GDP,
2003 0,269
Cost to register a business % of GNI
per capita 2005, -0,46
Prof. And tech. Workforce as % of Labour Force, 2004
Availability of Venture Capital, 2006,
0,81
Scientific and Technical Journal Articles, 2003, 0,67
- 0,13
University company collaboration,2006
0,85
ANALYSIS OF THE CORRELATION MATRIX BY COUNTRY
GROUPINGS
MORE SIMILARITIES THAN DATA RELATIVE TO FDI INFLOWS
HIGH CORRELATION WITH
UNIVERSITY COMPANY
COLLABORATION
(SUB SAHARAN AFRICA HAS THE LOWEST
VALUES)
RESEARCHERS IN R&D BUT EXCEPT
FOR AFRICA
TOTAL EXPENDITURE FOR R&D AS %
OF GDP
SCIENTIFIC AND TECHNICAL JOURNAL
PATENT APPLICATIONS GRANTED BY
THE USPTO
SCIENCE AND ENGINEERING
ENROLLMENT RATIO
GROSS TERTIARY ENROLLMENT
IPR PROTECTION
R&D CAPABILITIES AND EDUCATION
ARE IMPORTANT
CORRELATION FDI INFLOWS – FIRM LEVEL TECHNOLOGY ABSORPTION
ALL COUNTRIES: 0,12
ASIA: 0,46
SUB-SAHARAN AFRICA: -0,67
SOUTH AMERICA: 0,20
GREATER POSSIBILITY OF BACKWARD LINKAGES
GREATER SPILLOVER POTENTIAL
MISMATCH BETWEEN NSI COMPONENTS ATTRACTING FDI AND
THOSE NEEDED TO BUILDING ABSORPTIVE CAPACITY ESPECIALLY
FOR SOUTH AMERICA AND SUB -SAHARAN AFRICA
DIFFERENT FDI MOTIVATIONS
DIFFERENT DEGREE AND
AMOUNT OF
TECHNOLOGY TRANSFER
(SPILLOVER POTENTIAL)
NOT EFFECTIVENESS OF NSI IN FULFILLING THE FUNCTION
OF ATTRACTING AND ABSORBING EXTERNALITIES COMING
FROM FDI
THANK YOU!