Location of R&D abroad. An analysis on Global Cities

Davide Castellani and Katiuscia Lavoratori

John H Dunning Centre for International Business Discussion Papers from Henley Business School, University of Reading

Abstract: This paper investigates the determinants of the location of MNEs' overseas R&D activities, by focusing on two major drivers. On the one hand, external location factors lead the firm to separate its activities along the value chain and geographically disperse these activities in different locations. On the other hand, the R&D location choice may be driven by the existence of internal (within-firm) linkages that motivate firms to locate their value chain activities in the same location (co-location within-firm). Using data from the fDi Markets database, the study examines 2,580 location decisions of new R&D greenfield investments made by MNEs in 110 global cities worldwide, over the period 2003-2014. Results from Conditional and Mixed Logit econometric models reveal that both external and internal factors matter. Findings confirm the strong role of external agglomeration economies, but also suggest that previous R&D and production activities of the same MNE increase the probability to locate R&D in a given global city.

Keywords: location of international R&D; empirical methodology (search for similar items in EconPapers)
JEL-codes: F23 O30 R30 (search for similar items in EconPapers)
Date: 2017-10
New Economics Papers: this item is included in nep-cse, nep-dcm, nep-geo, nep-ino, nep-int, nep-sbm and nep-ure
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:rdg:jhdxdp:jhd-dp2017-03

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