Impact of foreign ownership on innovation

  1. Nieves Lidia Díaz-Díaz1,*,
  2. Inmaculada Aguiar-Díaz1,
  3. Petra De Saá-Pérez2

Article first published online: 13 DEC 2010

DOI: 10.1057/emr.2008.22

Issue

European Management Review

European Management Review

Volume 5, Issue 4, pages 253–263, Winter 2008

Additional Information

How to Cite

Díaz-Díaz, N. L., Aguiar-Díaz, I. and De Saá-Pérez, P. (2008), Impact of foreign ownership on innovation. European Management Review, 5: 253–263. doi: 10.1057/emr.2008.22

Author Information

  1. 1

    Department of Finance and Accounting, Faculty of Business and Economics, University of Las Palmas de Gran Canaria, Spain

  2. 2

    Department of Business Administration, Faculty of Business and Economics, University of Las Palmas de Gran Canaria, Spain

*Department of Finance and Accounting, Faculty of Business and Economics, University of Las Palmas de Gran Canaria Tafira Camps, Las Palmas 35017, Spain. Tel: +34 928 458232; Fax: +34 928 458177; E-mail: ndiaz@defc.ulpgc.es

Publication History

  1. Issue published online: 13 DEC 2010
  2. Article first published online: 13 DEC 2010

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Keywords:

  • foreign ownership;
  • innovation;
  • ownership structure;
  • multinational enterprise;
  • new products;
  • technological knowledge

Abstract On the basis of longitudinal data for a sample of 1267 Spanish industrial firms over a period of 5 years, this paper analyses the impact of foreign ownership concentration on the firm's innovation performance. To that end, the study investigates how the level of ownership affects the firm's new product development. The results reflect no significant differences between the innovation of foreign-owned firms and that of domestically owned firms. However, the results reveal that up to a certain level of foreign ownership, the lower possibility of appropriation of rents has a negative effect on innovation, while above that level of foreign ownership, the possibility of appropriating those rents increases the firm's innovation performance.

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