Have library access?
  • Journals

Revisit the Domestic Innovation Effect of Outward FDI in Taiwan: Quantity or Quality?



This study investigates how outward foreign direct investment (OFDI) influence innovation activity and efficiency in Taiwan. On the basis of a firm-level panel dataset of publicly listed electronics firms for the period 2002-2018, various estimations reveal that OFDI overall has a positive influence on research and development (R&D) expenditure and patent numbers. However, this R&D effect may be adverse across destinations and time periods. Before the late 2000s, the pro-R&D effect existed for OFDI to developing countries only, particularly China, but this R&D effect became negative after the late 2000s. The patent effect of OFDI is also found, particularly the technology sourcing through OFDI to advanced countries. Regarding high-novelty patents measured by inventions, we find that the OFDI in both developing and developed economies indicates a positive relationship with invention grants at home. Further, OFDI also facilitates multinational enterprises' promotion of R&D productivity in patents and high-novelty inventions in particular.


Export FDI R&D Patent

Parallel abstracts


Parallel keywords

出口 對外直接投資 研究與發展 專利


Acemoglu, D., G. Gancia, and F. Zilibotti, 2015, “Offshoring and Directed Technical Change”, American Economic Journal: Macroeconomics, 7: 84-122.
Aghion, P., A. Bergeaud, M. Lequien, and M. J. Melitz, 2018, “The Impact of Exports on Innovation: Theory and Evidence”, NBER Working Paper, No. 24600.
Aghion, P., P. Howitt, M. Brant-Collett, and C. García-Peñalosa, 1998, Endogenous Growth Theory, Cambridge, Massachusetts: MIT Press.
AlAzzawi, S., 2012, “Innovation, Productivity and Foreign Direct Investment-induced R&D Spillovers”, Journal of International Trade & Economic Development, 21: 615-653.
Amighini, A. A. and R. Rabellotti, 2010, “Outward FDI from Developing Country MNEs as a Channel for Technological Catch-up”, Seoul Journal of Economics, 23: 239-261.