Foreign Direct Investment in R&D: skin-deep and soul-deep co-operation

The new categories of 'skin-deep' and 'soul-deep' cooperation introduced in this paper offer good tools to determine whether penetration of foreign direct investment (FDI) in R&D is able to speed up the transformation of the Hungarian system of innovation.

Small-scale projects (skin-deep) may pave the way for larger-scale ones (soul-deep) by encouraging strong knowledge-based business relationships and introducing new partners into international business collaboration. The first period of FDI has had a positive impact on transformation and performance in the economy: R&D can play a bigger part in the second stage of transition.