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This chapter examines intra-industry spillover effects from inward foreign direct investment (FDI) in Swiss manufacturing firms. It suggests that (a) the assessment of spillovers calls upon a detailed analysis of these effects according to the mechanisms by which they occur (viz. the increase of competition, demonstration effects, and worker mobility), and (b) spillovers depend on the interaction between their mechanisms and the levels of domestic absorptive capacity. Results are affirmative in that high-technology firms benefit from FDI heightening competition, while mid-technology firms benefit from demonstration effects. And low-technology firms, which are not able to benefit from foreign affiliates via demonstration effects alone, manage to reap the benefit via the recruitment of MNCs labor. In addition, only firms which largely invest in absorbing foreign technology benefit from spillovers.

The importance of diversification and innovation in strengthening of global competitiveness has been emphasized in both tourism and local development literature. The aim of this chapter is to define the factors (company type, company size, intra-industry investments, collaboration with other companies, and associations) that influence the product- and service-diversification of hotels. This chapter addresses the diversification and innovation strategies of hotels, not only in the light of tourism literature, but also of local development literature, and it provides empirical evidence based on a company-level survey. The findings of the study show that company type, company size, sector-specific knowledge (intra-industry investments and experience of hotel workers), and collaboration with other companies and institutions matter for product- and service-diversification of hotels.

Purpose – The purpose of the chapter is to sketch the historical and evolutionary development of the Wichita Aircraft Manufacturing Cluster from inception to present and provide a descriptive narrative of aircraft industry knowledge spillovers currently driving effort to establish a Medical Device Manufacturing Cluster. The chapter illustrates how carbon-fiber composite materials knowledge and technology developed for use in the aviation industry is facilitating the creation and growth of medical device manufacturing.

Methodology/approach – We use an historical case study approach to trace the development of the aircraft cluster in the Wichita, KS metropolitan area. A number of technologies are identified that had initially been adopted by one firm but eventually diffused through other firms in the local cluster and ultimately throughout the industry.

Findings – In addition to providing examples of within industry knowledge spillovers, we provide an example of technology-based knowledge that is diffusing through the aircraft manufacturing industry and is now being used as the basis for establishing an unrelated industry manufacturing cluster. The use of carbon-fiber composites in aircraft manufacturing has diffused from one manufacturer to many in the industry. Subsequently, the knowledge base surrounding carbon-fiber composite materials is being used in a local R&D effort to create a second manufacturing cluster producing medical devices ranging from surgical instruments to joint-replacement implants.

Originality/value of paper – The chapter illustrates a unique example of a manufacturing cluster, intra-industry knowledge spillovers, and inter-industry knowledge spillovers to create a new manufacturing cluster.

The purpose of the chapter is to analyze how firms’ R&D investment decisions are affected by asymmetries in knowledge transmission, taking into account different sources of asymmetry, such as unequal know-how management capabilities and spillovers localization within an international oligopoly. We follow a game theoretic approach and consider a two-country imperfect competition model with two firms – one from each country – producing a homogeneous good. Both the firms’ mode of foreign expansion and R&D level are endogenously determined. We find that a better ability to manage knowledge flows incentivates the firm to invest more in R&D. By introducing geographically bounded spillovers, we also show that one-way foreign direct investment (FDI) stimulates the multinational enterprise (MNE) to raise its own R&D, due to both the elimination of transport cost and a greater ability to source. Furthermore, it emerges that when geographical proximity increases the MNE's capability to source local know-how, FDI is more likely to occur. The originality of this chapter relies on the analysis of the impact of asymmetries within an oligopoly model with endogenous R&D. Differently from other studies, this framework allows us to provide neat analytical results.

What roles do trade and foreign direct investment (FDI) play in international technology transfer? Do technologies introduced by multinational firms diffuse to local firms? How does the level of intellectual property rights (IPRs) protection in a country affect its ability to absorb foreign technologies? Using these questions as motivation, this paper surveys the recent trade literature on international technology transfer, paying particular attention to the role of FDI. Several useful conclusions emerge. First, the theoretical literature has shown that trade necessarily encourages growth only if knowledge spillovers are international in scope. Second, existing empirical evidence on the scope of knowledge spillovers (national versus international) is ambiguous. Third, recent empirical plant level studies have called into question earlier studies that argued that FDI has a positive impact on productivity of local firms that compete directly with multinationals. Fourth, there is strong evidence in support of vertical spillovers from FDI: i.e. those firms that either supply multinationals or use goods and services produced by them as intermediate inputs experience productivity gains from such interaction. Fifth, it is well established that the degree of global IPR protection affects the pattern of international trade and convincing evidence that it also influences flows of international technology transfer and FDI has also started to emerge.

The European Union’s Digital Markets Act (DMA) calls for far-reaching changes to the way economic activity will occur in EU digital markets. Before its remedies are imposed, it is critical to assess their impacts on individual markets, the digital sector, and the overall European economy. The European Commission (EC) released an Impact Assessment in support of the DMA that purports to evaluate it using cost/benefit analysis.

An economic evaluation of the DMA should consider its full impacts on dynamic competition. The Impact Assessment neither assesses the DMA's impact on dynamic competition in the digital economy nor evaluates the impacts of specific DMA prohibitions and obligations. Instead, it considers benefits in general and largely ignores costs. We study its benefit assessments and find they are based on highly inappropriate methodologies and assumptions. A cost/benefit study using inappropriate methodologies and largely ignoring costs cannot provide a sound policy assessment.

Instead of promoting dynamic competition between platforms, the DMA will likely reinforce existing market structures, ossify market boundaries, and stunt European innovation. The DMA is likely to chill R&D by encouraging free riding on the investments of others, which discourages making those investments. Avoiding harm to innovation is critical because innovation delivers large, positive spillover benefits, driving increases in productivity, employment, wages, and prosperity.

The DMA prioritizes static over dynamic competition, with the potential to harm the European economy. Given this, the Impact Assessment does not demonstrate that the DMA will be beneficial overall, and its implementation must be carefully tailored to alleviate or lessen its potential to harm Europe’s economic performance.

This volume is the outcome of the 33rd European International Business Academy (EIBA) conference held at the Faculty of Political Science of the University of Catania (Italy). This conference brought together more than 300 scholars from around the world to discuss theoretical and empirical issues in international business (IB), as well as their consequences and challenges to IB scholars and policy-makers. Organized around 10 thematic tracks, the conference is the annual forum for discussing major research issues in the IB realm. This volume is a collection of the best papers, which, selected through a blind refereeing process for presentation at the conference, make significant contributions by providing fresh new perspectives on a variety of relevant topics.