Abstract
This chapter investigates the role of foreign direct investments (FDIs) in the development of the green and digital inventions. We first map green and digital patents in the European Union (EU), and we show how inventions in the two technologies vary across EU countries and over time. Then, we delve into the citations included in EU green and digital patents and provide evidence on the location of the knowledge base leading to these inventions. Finally, we investigate whether inward and outward FDI play a role in favouring the connection of EU regions with knowledge sources abroad. In particular, by relying on a gravity-modelling framework, we find that the knowledge base of green and digital technologies developed in EU metropolitan and NUTS 3 regions positively correlate with innovative inward FDIs—namely EU innovative greenfield FDIs and cross-border M&As. This positive correlation, which appears stronger and more robust in the case of digital technologies and which is driven by more recent EU patent activities, suggests that foreign MNEs carrying out innovative activities in the EU act as pipelines allowing EU regions to access sources of knowledge abroad.
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Notes
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Recent contributions that have relied on hierarchical patent classification systems (e.g. IPC, CPC) include Ardito et al., 2018; Fujii & Managi, 2018 and Corradini et al., 2021. Other scholars have adopted keyword inclusion/exclusion criteria applied to the text fields of patents or publications (Webb et al., 2018; Van Roy et al., 2020; Bianchini, Damioli, & Ghisetti, 2022), whereas recent contributions have used a combination of both methods (Baruffaldi et al., 2020; EPO, 2020; Martinelli et al., 2021; WIPO, 2019). However, the lists of keywords and technological classes adopted in these works are often heterogeneous and not always exhaustive.
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We retrieve data on GDP at the EU regional level from the Cambridge Econometrics database and at country level from the World Development Indicators database.
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Data by country pairs on distance were obtained from the CEPII database. Data for region-country pairs were manually computed.
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For what concerns the control variables, model estimates suggest the expected associations, that is, a positive association of foreign backward citations with GDP of origin regions, GDP of country destinations (only for green patents) and patent stocks of origin regions and destination countries, as well as a negative association with geographical distance.
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Bello, M., Castellani, D., Damioli, G., Marin, G., Montresor, S. (2023). Innovative Foreign Direct Investments and the Knowledge Sources for Green and Digital Inventions: A Patent-Based Analysis. In: Lee, J.M., Ibarra-Olivo, J.E., Lavoratori, K., Li, L.(. (eds) Inequality, Geography and Global Value Chains. The Academy of International Business. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-24090-4_7
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