Abstract
Empirical studies have consistently illustrated the existence of a relationship between the level of productivity and the international commitment of firms. Few studies have considered the effects of learning by foreign direct investment (FDI). We use a sample of Spanish manufacturing firms to analyze the effect that the multinational enterprise status of a firm has on its ex-post innovative performance and productivity. Our findings reveal dynamic positive effects of FDI on the technological performance of firms, with increments in patents and product innovation taking place before subsequent increments in productivity occur.
Similar content being viewed by others
References
Almodóvar, P., López, J. E. N., & Riveros, P. H. (2009). La tipología estratégica como factor determinante de la empresa conjunta internacional. Investigaciones económicas, 33, 407–438.
Almodóvar, P., & Rugman, A. M. (2013). The M curve and the performance of spanish international new ventures. British Journal of Management (Online publication). doi:10.1111/1467-8551.12022.
Álvarez, I. (2003). Empresas extranjeras y efectos de derrame tecnológico. Madrid: Tesis Doctoral. Universidad Autónoma de Madrid.
Alvarez, I., Marín, R., & Santos-Arteaga, F. J. (2015). FDI entry modes, development and technological spillovers. The Manchester School, 83(5), 568–603.
Alvarez, I., & Molero, J. (2005). Technology and the generation of international knowledge spillovers: An application to Spanish manufacturing firms. Research Policy, 34(9), 1440–1452.
Ambos, T. C., Ambos, B., & Schlegelmilch, B. B. (2006). Learning from foreign subsidiaries: An empirical investigation of headquarters’ benefits from reverse knowledge transfers. International Business Review, 15(3), 294–312.
Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277–297.
Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(1), 29–51.
Arnold, J. M., & Hussinger, K. (2005). Export behavior and firm productivity in German manufacturing: a firm-level analysis. Review of World Economics, 141(2), 219–243.
Aw, B. Y., Chung, S., & Roberts, M. J. (2000). Productivity and turnover in the export market: Micro-level evidence from the Republic of Korea and Taiwan (China). The World Bank Economic Review, 14(1), 65–90.
Aw, B. Y., Roberts, M. J., & Winston, T. (2007). Export market participation, investments in R&D and worker training, and the evolution of firm productivity. The World Economy, 30(1), 83–104.
Belderbos, R. (2003). Entry mode, organizational learning, and R&D in foreign affiliates: Evidence from Japanese firms. Strategic Management Journal, 24(3), 235–259.
Belderbos, R., van Roy, V., & Duvivier, F. (2013). International and domestic technology transfers and productivity growth: Firm level evidence. Industrial and Corporate Change, 22(1), 1–32.
Bernard, A. B., & Bradford Jensen, J. (1999). Exceptional exporter performance: Cause, effect, or both? Journal of International Economics, 47(1), 1–25.
Brainard, S. L. (1997). An empirical assessment of the proximity-concentration trade-off between multinational sales and trade. The American Economic Review, 87(4), 520–544.
Buckley, P. J., & Carter, M. J. (1996). The economics of business process design: Motivation, information and coordination within the firm. International Journal of the Economics of Business, 3(1), 5–24.
Cantwell, J., & Mudambi, R. (2005). MNE competence-creating subsidiary mandates. Strategic Management Journal, 26(12), 1109–1128.
Cassiman, B., & Golovko, E. (2010). Innovation and internationalization through exports. Journal of International Business Studies, 42(1), 56–75.
Castellacci, F. (2008). Technology clubs, technology gaps and growth trajectories. Structural Change and Economic Dynamics, 19(4), 301–314.
Castellacci, F. (2011). Service innovation and the proximity-concentration trade-off model of trade and FDI. MPRA Working Paper.
Castellani, D., & Zanfei, A. (2007). Internationalisation, innovation and productivity: How do firms differ in Italy? The World Economy, 30(1), 156–176.
Choi, J., & Yeniyurt, S. (2015). Contingency distance factors and international research and development (R&D), marketing, and manufacturing alliance formations. International Business Review, 24(6), 1061–1071.
Coe, D. T., & Helpman, E. (1995). International R&D spillovers. European Economic Review, 39(5), 859–887.
Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(1), 128–152.
Cyert, R. M., & March, J. (1963). A behavioral theory of the firm. University of Illinois at Urbana-Champaign’s Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship.
Damijan, J. P., Kostevc, Č., & Polanec, S. (2010). From innovation to exporting or vice versa? The World Economy, 33(3), 374–398.
Delgado, M. A., Farinas, J. C., & Ruano, S. (2002). Firm productivity and export markets: A non-parametric approach. Journal of International Economics, 57(2), 397–422.
Dosi, G. (1988). Sources, procedures and microeconomic effects of innovation. Journal of Economic Literature, 26(3), 120–171.
Dosi, G. (1992). Fuentes, métodos y efectos microeconómicos de la innovación Ekonomiaz, 22, 269–332.
Dunning, J. H. (1988). Multinationals, technology, and competitiveness. London: Unwin Hyman.
Dunning, J. H., & Narula, R. (1995). The R&D activities of foreign firms in the United States. International Studies of Management & Organization, 25(1/2), 39–74.
Engel, D., & Procher, V. (2012). Export, FDI and firm productivity. Applied Economics, 44(15), 1931–1940.
Eriksson, K., Johanson, J., Majkgard, A., & Sharma, D. D. (1997). Experiential knowledge and cost in the internationalization process. Journal of International Business Studies, 28(2), 337–360.
Esteve-Pérez, S., & Rodríguez, D. (2013). The dynamics of exports and R&D in SMEs. Small Business Economics, 41(1), 219–240.
Forsgren, M. (2002). The concept of learning in the Uppsala internationalization process model: A critical review. International Business Review, 11(3), 257–277.
García, F., Jin, B., & Salomon, R. (2012). Does inward foreign direct investment improve the innovative performance of local firms? Research Policy, 42(1), 231–244.
Girma, S., Kneller, R., & Pisu, M. (2005). Exports versus FDI: An empirical test. Review of World Economics, 141(2), 193–218.
Golovko, E., & Valentini, G. (2011). Exploring the complementarity between innovation and export for SMEs’ growth. Journal of International Business Studies, 42(3), 362–380.
Gomes, L., & Ramaswamy, K. (1999). An empirical examination of the form of the relationship between multinationality and performance. Journal of International Business Studies, 30(1), 173–187.
Greenaway, D., Gullstrand, J., & Kneller, R. (2005). Exporting may not always boost firm productivity. Review of World Economics, 141(4), 561–582.
Greenaway, D., & Kneller, R. (2007). Firm heterogeneity, exporting and foreign direct investment. The Economic Journal, 117(517), F134–F161.
Griffith, R., Huergo, E., Mairesse, J., & Peters, B. (2006). Innovation and productivity across four European countries. Oxford Review of Economic Policy, 22(4), 483–498.
Guillén, M. F., & García-Canal, E. (2010). The new multinationals: Spanish firms in a global context. Cambridge: Cambridge University Press.
Håkanson, L., & Nobel, R. (2001). Organizational characteristics and reverse technology transfer (pp. 395–420). MIR: Management International Review.
Head, K., & Ries, J. (2003). Heterogeneity and the FDI versus export decision of Japanese manufacturers. Journal of the Japanese and International Economies, 17(4), 448–467.
Helpman, E., Melitz, M. J., & Yeaple, S. R. (2004). Export versus FDI with heterogeneous firms. American Economic Review, 8(1), 300–316.
Hitt, M. A., Hoskisson, R. E., & Kim, H. (1997). International diversification: Effects on innovation and firm performance in product-diversified firms. Academy of Management Journal, 40(4), 767–798.
Johanson, J., & Vahlne, J. (1977). The internationalization process of the firm-a model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8, 23–32.
Johanson, J., & Wiedersheim-Paul, F. (1975). The Internationalization of the Firm- Four Swedish Cases. Journal of Management Studies, 12(3), 305–322.
Jonsson, A., & Foss, N. J. (2011). International expansion through flexible replication: Learning from the internationalization experience of IKEA. Journal of International Business Studies, 42(9), 1079–1102.
Kafouros, M. I., Buckley, P. J., & Clegg, J. (2012). The effects of global knowledge reservoirs on the productivity of multinational enterprises: The role of international depth and breadth. Research Policy, 41(5), 848–861.
Kafouros, M. I., Buckley, P. J., Sharp, J. A., & Wang, C. (2008). The role of internationalization in explaining innovation performance. Technovation, 28(1), 63–74.
Kimura, F., & Kiyota, K. (2006). Exports, FDI, and productivity: Dynamic evidence from Japanese firms. Review of World Economics, 142(4), 695–719.
Kotabe, M., Srinivasan, S. S., & Aulakh, P. S. (2002). Multinationality and firm performance: The moderating role of R&D and marketing capabilities. Journal of International Business Studies, 33(1), 79–97.
Liu, X., & Buck, T. (2007). Innovation performance and channels for international technology spillovers: Evidence from Chinese high-tech industries. Research Policy, 36(3), 355–366.
Love, J. H., & Ganotakis, P. (2013). Learning by exporting: Lessons from high-technology SMEs. International Business Review, 22(1), 1–17.
Luo, Y., & Tung, R. L. (2007). International expansion of emerging market enterprises: A springboard perspective. Journal of International Business Studies, 38(4), 481–498.
Marin, R., & Alvarez, I. (2009). Technological effects of M&As in Spanish manufacturing. Industrial and Corporate Change, 18(4), 761–784.
Mathews, J. A. (2002). Competitive advantages of the latecomer firm: A resource-based account of industrial catch-up strategies. Asia Pacific Journal of Management, 19(4), 467–488.
Mathews, J. A. (2006). Dragon multinationals: New players in 21st century globalization. Asia Pacific Journal of Management, 23(1), 5–27.
Melitz, M. J. (2003). The impact of trade on intra-industry reallocations and aggregate industry. Econometrica, 71(6), 1695–1725.
Melitz, M. J., & Ottaviano, G. (2008). Market size, trade, and productivity. Review of Economic Studies, 75(1), 295–316.
Molero, J., Buesa, M., & Casado, M. (1995). Technological strategies of MNCs in intermediate countries: The case of Spain. In J. Molero (Ed.), Technological innovation, multinational corporations and new international competitiveness. The case of intermediate countries (pp. 265–291). Reading: Harwood Academic Publishers.
Monreal-Pérez, J., Aragón-Sánchez, A., & Sánchez-Marín, G. (2011). A longitudinal study of the relationship between export activity and innovation in the Spanish firm: The moderating role of productivity. International Business Review, 21(5), 862–877.
Mudambi, R. (2002). Knowledge management in multinational firms. Journal of International Management, 8(1), 1–9.
Mudambi, R., & Navarra, P. (2004). Is knowledge power? Knowledge flows, subsidiary power and rent-seeking within MNCs. Journal of International Business Studies, 35(5), 385–406.
Mudambi, R., Piscitello, L., & Rabbiosi, L. (2013). Reverse knowledge transfer in MNEs: Subsidiary innovativeness and entry modes. Long Range Planning. doi:10.1016/j.lrp.2013.08.013.
Neary, J. P. (2009). Trade costs and foreign direct investment. International Review of Economics & Finance, 18(2), 207–218.
Nocke, V., & Yeaple, S. (2007). Cross-border mergers and acquisitions vs. greenfield foreign direct investment: The role of firm heterogeneity. Journal of International Economics, 72(2), 336–365.
Petersen, B., Pedersen, T., & Lyles, M. A. (2008). Closing knowledge gaps in foreign markets. Journal of International Business Studies, 39(7), 1097–1113.
Rabbiosi, L. (2011). Subsidiary roles and reverse knowledge transfer: An investigation of the effects of coordination mechanisms. Journal of International Management, 17(2), 97–113.
Raff, H., Ryan, M., & Stähler, F. (2009). The choice of market entry mode: Greenfield investment, M&A and joint venture. International Review of Economics & Finance, 18(1), 3–10.
Rodríguez, D. (2010). Las empresas industriales en 2009. Madrid: Ministerio de Industria, Turismo y Comercio.
Roodman, D. (2006). How to do xtabond2: An introduction to difference and system GMM in Stata. Center for Global Development Working Paper (103).
Roodman, D. (2009). A note on the theme of too many instruments. Oxford Bulletin of Economics and Statistics, 71(1), 135–158.
Roodman, D. (2012). XTABOND2: Stata module to extend xtabond dynamic panel data estimator. Washington, DC: Statistical Software Components, Centre for Global Development.
Salomon, R., & Jin, B. (2007). Does knowledge spill to leaders or laggards? Exploring industry heterogeneity in learning by exporting. Journal of International Business Studies, 39(1), 132–150.
Salomon, R. M., & Shaver, J. M. (2005). Learning by exporting: new insights from examining firm innovation. Journal of Economics & Management Strategy, 14(2), 431–460.
Sanna-Randaccio, F., & Veugelers, R. (2007). Multinational knowledge spillovers with decentralised R&D: A game-theoretic approach. Journal of International Business Studies, 38(1), 47–63.
Silva, A., Afonso, O., & Africano, A. P. (2012). Learning-by-exporting: what we know and what we would like to know. The International Trade Journal, 26(3), 255–288.
Tomiura, E. (2007). Foreign outsourcing, exporting, and FDI: A productivity comparison at the firm level. Journal of International Economics, 72(1), 113–127.
Triguero, Á., & Córcoles, D. (2012). Understanding innovation: An analysis of persistence for Spanish manufacturing firms. Research Policy, 42(2), 340–352.
Vernon, R. (1966). International investment and international trade in the product cycle. The Quarterly Journal of Economics, 80(2), 190–207.
Wagner, J. (2006). Exports, foreign direct investment, and productivity: Evidence from German firm level data. Applied Economics Letters, 13(6), 347–349.
Wagner, J. (2007). Exports and productivity: A survey of the evidence from firm-level data. The World Economy, 30(1), 60–82.
Yamin, M., & Otto, J. (2004). Patterns of knowledge flows and MNE innovative performance. Journal of International Management, 10(2), 239–258.
Yang, Q., Mudambi, R., & Meyer, K. E. (2008). Conventional and reverse knowledge flows in multinational corporations†. Journal of Management, 34(5), 882–902.
Yeaple, S. R. (2009). Firm heterogeneity and the structure of US multinational activity. Journal of International Economics, 78(2), 206–215.
Yeoh, P. (2004). International learning: antecedents and performance implications among newly internationalizing companies in an exporting context. International Marketing Review, 21(4/5), 511–535.
Zheng, N., Wei, Y., Zhang, Y., & Yang, J. (2016). In search of strategic assets through cross-border merger and acquisitions: Evidence from Chinese multinational enterprises in developed economies. International Business Review, 25(1A), 177–186.
Acknowledgements
Francisco J. Santos-Arteaga and Celia Torrecillas acknowledge the support provided by the Research Project Ref. ECO2010-16609 funded by the Spanish Ministry of Science and Innovation. The authors would like to thank Isabel Alvarez Gonzalez for her valuable contribution to the initial research giving place to the current manuscript. The authors would also like to thank the anonymous reviewers and the editor for their insightful comments and suggestions.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Santos-Arteaga, F.J., Torrecillas, C. & Tavana, M. Dynamic effects of learning on the innovative outputs and productivity in Spanish multinational enterprises. J Technol Transf 44, 97–131 (2019). https://doi.org/10.1007/s10961-017-9597-5
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10961-017-9597-5