Greenfield FDIs as a catalyst for technological collaborations between European regions and emerging countries

ABSTRACT

This research emphasizes the increasing role of emerging countries in the advancement of future technologies and investigates the extent to which greenfield foreign direct investments (FDIs) can represent a bridge capable of stimulating technological collaboration opportunities between European regions and emerging countries. Utilizing a balanced panel dataset spanning 15 years from 2003 to 2017 and covering 286 European regions, we conducted a study that integrated collaborative patent data and foreign investments with emerging countries. Our findings indicate that technological collaboration primarily depends on inward FDIs (from emerging countries to Europe) rather than outward FDIs (from Europe to emerging countries). Furthermore, we discovered that a mutually reinforcing process can significantly enhance this collaboration. In this context, such a process acts as a cornerstone for the European Union (EU), offering a potential solution to navigate the paradoxical pressure between the rise of protectionism in response to the imbalances and inequalities stemming from globalization and the need to promote an environment conducive to global openness, competition and innovation.

KEYWORDS:

• Technological collaboration
• greenfield investments
• inward and outward foreign direct investments
• European regions
• emerging economies

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 We are aware of the limits of this choice since the globalisation of innovation is not confined to greenfield (or brownfield) FDIs but involves other forms of investments, such as the outsourcing of R&D activities to foreign partners or R&D strategic alliances (D’Agostino and Santangelo 2012).

2 In this study, we limited our analysis to EPO patents. We assume that EPO patents are likely to cover at least the most qualitative outputs of the collaborative process between European regions and emerging countries. Moreover, the stringent standards of the European patent examination process assure higher data quality and affordability.

3 Despite the limitations concerning the use of patents to measure technological collaborations, this choice is validated in the literature because patents are often used as a proxy to measure the degree of innovation (Kim and Lee 2015) as well as of collaboration (De Noni, Ganzaroli, and Orsi 2017, De Noni, Orsi, and Belussi 2018). In turn, they have been found to be strongly reliable (Acs, Anselin, and Varga 2002).

4 We also check the model with total inward and outward European FDIs (exclude total bi-directional FDIs with BRICS), and the results are consistent.