Subsidizing Away Exports? A Note on R&D-policy towards Multinational Firms

Pehr-Johan Norbäck

No 832, Working Paper Series from Research Institute of Industrial Economics

Abstract: In this paper, I investigate whether instead of strengthening home-based production, government R&D-subsidies can induce R&D-intensive firms to locate production abroad. Investigating firm-level data on Swedish MNEs, however, I find no evidence of such relocation. R&D subsidies rather tend to en courage export production at the expense of foreign production. The theory presented suggests that this is consistent with technology transfer costs, which outweigh trade costs for physical goods.

Keywords: Multinational Firms; R&D; Subsidies; Location; Empirical Analyses (search for similar items in EconPapers)
JEL-codes: F23 L13 O33 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2010-05-19
New Economics Papers: this item is included in nep-ino, nep-int and nep-sbm
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Journal Article: Subsidizing Away Exports? A Note on R&D-policy Towards Multinational Firms (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0832

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