The Role of Strategic Interactions in Innovation and Foreign Direct Investment for Small and Medium Enterprises
Lead Research Organisation:
University of Sheffield
Department Name: Economics
Abstract
Governments in developed and developing countries outline the importance of SMEs and the attraction of multinational firms as a key to generating sustained industrial productivity growth. However, currently, to the best of my knowledge, there is not a theoretical foundation for the growth-enhancing effect of SMEs and the mechanism through which multinational firms increase an industry's productivity growth is not well understood. In my Ph.D. thesis, I will investigate how promoting SMEs can enhance an industry's productivity growth and how these effects interact with flows of foreign direct investment (FDI) in such a way that they both affect innovation and welfare. Promoting SMEs could lead to a significant impact on innovation and welfare and it could affect and be affected by FDI flows. However, policies promoting SME or FDI require a theoretical foundation and empirical analysis.
The aims of the project are threefold. 1) Develop a theoretical model with competition and a productivity distribution of firms to examine how innovation decisions are altered when we change the distribution of small and medium firms in an industry. 2)Introduce FDI into the theoretical framework to explore the impact of FDI on productivity, innovation and welfare. 3)Test the theoretical predictions using a large data set containing firms in East Asian countries.
When it comes to research methods, the project involves both empirical and theoretical components and also crosses the trade literature and the literature on innovation in economics (based in industrial economic theory). Hence the project requires advanced skills in mathematics (mostly optimisation and comparative static analysis) and microeconometrics.
The aims of the project are threefold. 1) Develop a theoretical model with competition and a productivity distribution of firms to examine how innovation decisions are altered when we change the distribution of small and medium firms in an industry. 2)Introduce FDI into the theoretical framework to explore the impact of FDI on productivity, innovation and welfare. 3)Test the theoretical predictions using a large data set containing firms in East Asian countries.
When it comes to research methods, the project involves both empirical and theoretical components and also crosses the trade literature and the literature on innovation in economics (based in industrial economic theory). Hence the project requires advanced skills in mathematics (mostly optimisation and comparative static analysis) and microeconometrics.
Organisations
People |
ORCID iD |
| Antonio Navas (Primary Supervisor) | |
| Bingxue Wang (Student) |
| Description | After working with this project about 17 months, I have found that multinational firms have stronger pro-competitive effect than exporters with an environment of oligopolistic competition, which most former literature focus only on the perfect competition and monopolistic competition. I recently move to investigate the welfare effect of the model including multinational firms compared to the model which only contains exporters in the settings. |
| Exploitation Route | My work is building theretical model in the trade field and explain that which strategies are the most economy for individuals to choose. For example, it can have an effect on small and medium firms to choose their better strategy and for policymaker to encourage the firms to thrive. |
| Sectors | Creative Economy |