R&D internationalization and firm productivity. Does the host country matter?

Jaana Rahko

Applied Economics, 2021, vol. 53, issue 16, 1807-1825

Abstract: The prior literature has established that the internationalization of corporate R&D is motivated by access to new markets and technological knowledge. However, the empirical literature has overlooked whether the market and technological characteristics of R&D host countries influence the firm-level productivity gains from international R&D. This study empirically examines whether international R&D activities affect the productivity of European multinational firms. Estimating an R&D augmented production function shows that the output elasticity of R&D depends positively on the share of international R&D activities. The analysis further shows that the improvements are associated only with offshore R&D in host countries that have experienced fast economic growth or that are technologically stronger than firms’ home country.

Date: 2021
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DOI: 10.1080/00036846.2020.1853668

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