Essays on disparities in innovative performance and economic development in emerging countries: a regional and firm-level investigation

The global economic system has been undergoing fundamental changes since the 1980s. Many emerging countries drastically increased their openness to trade and foreign investments. Formerly socialist countries entered a transition towards a market-based model and deepened their integration into the global economy. As a result, the geography of trade, investment flows, and innovation is becoming more multipolar. This thesis seeks to improve our understanding of the links between these macro-level shifts and the geography of innovation, spatial patterns of economic deprivation, as well as firm-level outcomes in emerging countries. This thesis is structured into an introductory chapter and four analytical papers. The introductory chapter outlines three themes corresponding to the areas to which this thesis makes a contribution: (1) the interplay of the local and the global dimension in shaping regional patterns of knowledge creation, (2) the link between the relative weight of the private sector and spatial patterns of economic deprivation, and (3) the role of global production networks and the changing geography of trade in shaping regional patterns of innovative performance and heterogeneous firm-level outcomes. The first paper examines the geography of innovation in Russia, adopting a perspective that combines Soviet-era legacies, contemporaneous regional conditions, and global linkages. The results shed light on multinational enterprises’ (MNEs) role as key agents providing Russian regions with knowledge from distant places. The findings simultaneously point to the importance of path dependencies in regional patterns of knowledge generation. The second paper investigates the link between regional innovative performance in Brazil, Mexico, and Colombia and investments of MNEs categorized by entry mode and business function. The analysis suggests that the relationship between global linkages established by MNEs and regional knowledge creation is jointly shaped by the heterogeneity of MNEs’ investments and the heterogeneity of region-specific conditions in Latin American economies at different stages of technological development. The third paper focuses on Vietnam, a country that has seen some provinces act as pioneers and others as laggards in the journey towards an outward-oriented marketbased economy. The link between the private sector’s weight in the economy and economic deprivation is a topic of considerable policy interest, but its subnational dimension remains underexplored. The analysis considers the relationship between provincial differences in the change of private firms’ formal employment share and changes in the geography of economic deprivation. The findings reveal that increases in private firms’ employment share are associated with reductions in poverty. MNEs appear to be a key driver of this association. Finally, the fourth paper concerns Vietnam’s growing trade with China. It looks at the link between imports from China and firm-level outcomes in Vietnam’s manufacturing sector. The results show that, contrary to previous findings for advanced economies, exposure to imports from China is positively linked with firm-level employment. Information on trade in intermediates suggests that inputs imported from China may support Vietnam’s export growth. The findings cast light on the necessity to consider the role of global production networks and trade in intermediates when assessing the developmental implications of changing trade patterns.