Overseas R&D Activities and Home Productivity Growth: Evidence from Japanese Firm-Level Data

Yasuyuki Todo and Satoshi Shimizutani

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This paper investigates the impact of overseas subsidiaries' R&D activities on the productivity growth of parent firms using firm-level panel data for Japanese multinational enterprises. We distinguish between overseas R&D for the utilization and acquisition of foreign advanced knowledge, or innovative R&D, and overseas R&D for the adaptation of technologies and products to local conditions, or adaptive R&D. Our major finding is that overseas innovative R&D helps to raise the productivity growth of the parent firm, while overseas adaptive R&D has no such effect. In addition, we examine whether overseas innovative R&D has an indirect effect on home productivity growth by improving the rate of return on home R&D. However, we find no evidence of such an indirect effect, suggesting that overseas innovative R&D does not engender any knowledge transfers from overseas to home R&D units.

Pages: 31 pages
Date: 2007-03
New Economics Papers: this item is included in nep-dev, nep-eff, nep-ino, nep-ipr, nep-pr~ and nep-knm
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Citations: View citations in EconPapers (12)

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Related works:
Journal Article: OVERSEAS R&D ACTIVITIES AND HOME PRODUCTIVITY GROWTH: EVIDENCE FROM JAPANESE FIRM‐LEVEL DATA* (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:07008

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