Dual Economy and Impacts of Foreign Investment on Private R&D in Slovakia
Dual Economy and Impacts of Foreign Investment on Private R&D in Slovakia

Summary/Abstract: This paper analyses development of the private R&D system in Slovakia after 1989. In 1990s, Slovakia experienced a painful economic transition, privatization and influx of the foreign direct investment. These developments were major factors behind sharp fall in R&D spending and levels of innovativeness. Moreover, Slovakia became a dual economy. Branch-plants of multinational compa-nies benefited from technology diffusion and accounted for high productivity levels. Domestic companies generated low demand on innovative solutions and competed with low costs of production. There, however, were some ‘islands of excellence’. This was a case of the Zentiva pharmaceutical firm, which ac-counted for a distinctive system of R&D and innovation patterns. The Zentiva case study is analysed via patters of corporate governance, entry of a smart foreign investor and firm’s international expansion. Concluding chapter summarises findings on role of FDI in fostering innovations and private R&D.

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