Causal Linkages Between Patenting Abroad and Promoting FDI Through the Prism of Social Network Analysis

This paper presents a combination between social network analysis (SNA) and Granger causality tests for 34 members of the OECD in the period 2005–2018. We examine the possible causal linkages which have not been considered adequately so far, between outward-inward FDI and patenting abroad networks for promoting FDI. We demonstrate that linking frequency of patenting abroad and FDI participation increased, and that the bi-directional causal relationship between patentees and official foreign direct investment (OFDI) is strongly heterogeneous with some positive effects. This indicates causality from international patenting to FDI and not vice versa. Hence, the number of patents registered by foreigners helps FDI investors to conduct investments.