Determinants of International R&D Activities: Evidence from a Gravity Model

Sandra Leitner, Robert Stehrer and Bernhard Dachs

Chapter Chapter 10 in The Geography of Networks and R&D Collaborations, 2013, pp 175-199 from Springer

Abstract: Abstract Firms not only produce or sell their products and services abroad, but increasingly also conduct research and development (R&D) at locations outside their home countries – a phenomenon referred to as the ‘internationalization of business R&D’. This chapter analyses the internationalization of business R&D for OECD countries and identifies specific home and host country characteristics that are conducive or obstructive to R&D expenditure of foreign affiliates. The analysis employs a recently compiled novel data set on R&D expenditure of foreign-owned firms in the manufacturing sectors of a set of OECD countries. The results point to the pivotal role of market size and of cultural, physical and technological proximity for R&D efforts of foreign-owned firms. Moreover, the analysis demonstrates that sufficient human capital and strong indigenous technological capabilities in the host country tend to be conducive to R&D activities of foreign affiliates. In contrast, a rich human capital base in the home country is obstructive to the process of R&D internationalization. Geographic distance turns out to be a strong deterrent.

Keywords: Host Country; Home Country; Gravity Model; Innovative Activity; Technological Spillover (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:spr:adspcp:978-3-319-02699-2_10

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DOI: 10.1007/978-3-319-02699-2_10

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