An Econometrical Approach of the Relationship Between Innovation and Net Outward Investment Position

Abstract

Starting from the theory of the Investment Development Path (IDP) and competitive advantages, this study presents an econometrical approach of the relationship between net outward investment position, given by the net outward investment per capita (NOI), and innovation capabilities, reflected by the global innovation index (GII).  The results of the analysis carried out for the worldwide economies, in the year 2013, using five models demonstrate that there is no significant correlation between NOI, as dependent variable, and GII as independent one. Thus, the highest coefficient of determination value was .201 (cubic model), reflecting the fact that only 20.1% of the variation in the NOI is explained by GII. Therefore, the level of country's innovation capacities is not one of the main forces that determine its NOI position.