Foreign direct investment and innovation in Europe regions: The moderating role of institutional quality

Authors

  • Amal Jaouadi Hamrouni Excelia Business School
  • Koffi Serge William Yao Excelia Business School
  • Wendzineguemlafi Dieudonné Tonde Nazi Boni University, Bobo-Dioulasso, Burkina Faso

Keywords:

'Foreign direct investment', Innovation, institutional quality, European countries

Abstract

This paper examines the effect of foreign direct investment (FDI) on innovation using country-level data for Europe regions. It also investigates the moderating role of institutional quality in this relationship. The results show that FDI has a negative effect on innovation in the host country. They also reveal that institutional quality plays a moderating role in this relationship. They point out that institutional items do not equally matter in the relationship between FDI and local innovation for Western Europe as for Eastern and Central Europe. These findings highlight the channels through which institutions can boost innovation from FDI.

Published

2025-12-12

Issue

Vol. 17 No. 4 (2025)

Section

Forthcoming

License

Copyright (c) 2025 Amal Jaouadi HAMROUNI, Koffi Serge William YAO, Wendzineguemlafi Dieudonné TONDE

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