Economics at your fingertips  

R&D, foreign ownership, and corporate groups: Evidence from Japanese firms

Hyeog Ug Kwon () and Jungsoo Park ()

Research Policy, 2018, vol. 47, issue 2, 428-439

Abstract: This study empirically examines whether the research and development (R&D) activities of foreign-owned firms in Japan differ notably from the R&D activities of domestically-owned firms based on a firm-level panel dataset. Our study carefully disentangles the significant differences in R&D investment behavior of subsidiaries due to three different reasons: having a foreign parent, corporate group affiliation, and the degree of relatedness between business units. The results reveal the following. First, firms that are majority-owned by another firm are less active in R&D than independent firms. Second, foreign ownership does not matter if the parent firm is from a G7 country, but R&D intensity is significantly and positively associated with foreign ownership if the parent firm is from a non-G7 country. Finally, for subsidiaries whose business is related to that of their parent firm, the R&D intensity is lower if the parent is a domestic firm, but higher if it is a foreign firm. These findings imply that globalization and the integration of firms may not only affect production patterns and global supply chains, but may also have an important impact on the level of domestic R&D activities.

Keywords: R&D; Foreign ownership; Corporate groups; Knowledge spillovers; Foreign direct investment (search for similar items in EconPapers)
JEL-codes: F23 F21 O30 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.respol.2017.11.010

Access Statistics for this article

Research Policy is currently edited by M. Bell, B. Martin, W.E. Steinmueller, A. Arora, M. Callon, M. Kenney, S. Kuhlmann, Keun Lee and F. Murray

More articles in Research Policy from Elsevier
Bibliographic data for series maintained by Nithya Sathishkumar ().

Page updated 2021-04-07
Handle: RePEc:eee:respol:v:47:y:2018:i:2:p:428-439