This paper studies whether inward FDI deregulation promotes innovation by firms in the host country. A theoretical framework, in which the entry of additional foreign firms is associated with both spillover and competition effects, is built to guide the empirical evaluation. Exploiting data on...

This paper studies whether foreign investment deregulation promotes firm innovation. A theoretical framework, in which the spillover and competition effects from more foreign firms induced by foreign investment deregulation, is built to guide the empirical evaluation. Exploiting the data on...