Foreign Ownership and Firm Innovation: Evidence from Korea |
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Authors: | Denis Yongmin Joe Heechan Yoo |
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Institution: | 1. College of Global Business, Korea University, Sejong-Si, Korea;2. Korea Exchange, Seoul, Korea |
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Abstract: | ABSTRACTThis study examines whether foreign equity investment promotes domestic firms’ innovation activities. Using panel data on the Korean firms during the 1999–2013 period, we find that foreign ownership has a positive effect on firms’ innovation activities. Furthermore, we also show that, as compared to non-chaebol firms, chaebol firms’ innovation activity becomes much greater with the increase of foreign ownership. Finally, we investigate industry-level spillover effects of innovation. Specifically, we find that foreign ownership promotes innovation activities via forward linkage, the effect of which is also more pronounced in chaebol firms. |
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Keywords: | Foreign ownership innovation chaebol spillover Korea |
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