Melbourne Institute Working Paper Series Database (1984 - 2010)

Melbourne Institute Working Paper No. 20/2000

Foreign Ownership, Foreign Competition and Innovation in Australian Enterprises

by

Craig Lofts and Joanne Loundes

Date: October 2000

Abstract: This paper empirically investigates the relationship between innovative effort, measured by R&D intensity, and foreign shareholding and competition. The data set used is a sample of large Australian firms between 1994 and 1997. Previous studies have used aggregate variables to account for these international factors. The theory and analysis are extended to account for the differing attributes of separate geographic regions. The results show foreign shareholding and competition to be important influences in determining the level of innovative activity in Australia. In particular, strong evidence is found of a positive association of revenue earned in Europe and a negative association of Asian shareholdings with domestic innovation levels.

 

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