Foreign Subsidiaries in the East German Innovation System – Evidence from Manufacturing Industries

Arbeitspapier

This paper analyses the extent of technological capability of foreign subsidiaries located in East Germany, and looks at the determinants of foreign subsidiaries' technological sourcing behaviour. The theory of international production underlines the importance of strategic and regional level variables. However, existing empirical approaches omit by and large regional level factors. We employ survey evidence from the "FDI micro database" of the IWH, that was only recently made available, to conduct our analyses. We find that foreign subsidiaries are above average technologically active in comparison to the whole East German manufacturing. This can be partially explained by the industrial structure of foreign direct investment. However, only a limited share of foreign subsidiaries with R&D and/or innovation activity source technological knowledge from the East German innovation system. If a subsidiary follows a competence augmenting strategy or does local trade, it is more likely to source technological knowledge locally. The endowment of a region with human capital and a scientific infrastructure has a positive effect too. The findings suggest that foreign subsidiaries in East Germany are only partially linked with the regional innovation system. Policy implications are discussed.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IWH Discussion Papers ; No. 4/2008

Classification and Topics

• Classification: Wirtschaft ; Innovation; Research and Development; Technological Change; Intellectual Property Rights: General ; Technological Change: Government Policy ; International Factor Movements and International Business: General
• Subject: East Germany ; Regional Innovation System ; Foreign Direct Investment ; Verarbeitendes Gewerbe ; Tochtergesellschaft ; Direktinvestition ; Ausländisch ; Betriebliche Forschung ; Innovationspolitik ; Neue Bundesländer

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Günther, Jutta ; Jindra, Björn ; Stephan, Johannes
• Event: Veröffentlichung
• (who): Leibniz-Institut für Wirtschaftsforschung Halle (IWH)
• (where): Halle (Saale)
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/29965
• URN: urn:nbn:de:gbv:3:2-7290
• Last update: 10.03.2025, 11:43 AM CET