This book considers patterns of inward foreign investment in emerging economies. Foreign Direct Investment (FDI) has long been recognized as a potential source of developmental benefits for host countries, but existing studies have not always considered the heterogeneity of FDI or the types of activities pursued by multinationals in peripheral markets. This book examines the uneven spread of innovation-intensive investment to emerging economies, and asks questions about its determinants. Through use of large scale firm surveys, firm and country level data, and case studies, this book demonstra ... More

This book considers patterns of inward foreign investment in emerging economies. Foreign Direct Investment (FDI) has long been recognized as a potential source of developmental benefits for host countries, but existing studies have not always considered the heterogeneity of FDI or the types of activities pursued by multinationals in peripheral markets. This book examines the uneven spread of innovation-intensive investment to emerging economies, and asks questions about its determinants. Through use of large scale firm surveys, firm and country level data, and case studies, this book demonstrates that host country institutions and policies have a strong impact on the likelihood and intensity of local innovation by multinationals. This book unpacks the multifaceted concept of innovation, and proposes multiple measures including R&D spending, patents, and other indicators. The analysis also considers sectoral differences in innovation patterns, and how innovative foreign firms do or do not become embedded in host economies. This book modifies comparative institutional analysis for an era of multinational production, and has important implications for industrial policy and investment promotion practices. Host country institutions, which serve as intermediaries between foreign forms and domestic markets, have an important role to play in reducing the risk inherent in decentralized innovation. This book therefore contributes to diverse literatures on the political economy of FDI, development, and international business studies.