Outward Foreign Direct Investment and Domestic Innovation Efforts: Evidence from India
Document Type
Article
Publication Date
2022
Abstract
This paper examines the role of outward foreign direct investment (OFDI) by Indian firms on domestic firms' R&D using unique firm-level data for 2008–2018. While correcting for endogeneity arising from the sample selection, we apply panel data models to evaluate the OFDI and domestic R&D nexus. Our empirical analysis highlights the presence of positive impact of OFDI on the firm's decision to undertake R&D activities. Further, we find that irrespective of the mode of OFDI, i.e., both wholly-owned subsidiaries and joint ventures encourages firms to participate in R&D activities. However, only OFDI in the form of wholly-owned subsidiaries increases the R&D intensity of the parent firms' R&D activities.
Recommended Citation
Reddy, Ketan; Sasidharan, Subash; and Doytch, Nadia, (2022). Outward Foreign Direct Investment and Domestic Innovation Efforts: Evidence from India. Archīum.ATENEO.
https://archium.ateneo.edu/asog-pubs/250