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Geographies of Knowledge Sourcing and the Value of Knowledge in Multilocational Firms

Anthony Frigon and David Rigby

No 2132, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: A growing body of research in economic geography, international business management and related fields focuses on geographies of knowledge sourcing. This work examines the organizational structure of innovation activities within the firm, the mechanisms by which knowledge is extracted from various external sources and the geography of these different activities. We augment this literature by exploring knowledge sourcing within multilocational firms operating in the US using a unique dataset matching patent records to firm-level ownership and geographical data. The results add value to existing research in three ways. First, the establishments of multilocational corporations are shown to produce different kinds of knowledge in different locations. Second, the patents generated within a firm’s establishments are linked to the knowledge stocks of the cities where they operate, supporting a vision of geographical knowledge sourcing. Third, the complexity of knowledge produced within the firm as a whole is positively related to the number of establishments in which multilocational firms undertake innovation activities. In sum these data suggest that multilocational firms distribute their innovation activities across locations in order to secure access to local pools of tacit knowledge. The complexity value of firms’ knowledge production is enhanced as a result of this spatial strategy.

Date: 2021-10, Revised 2021-10
New Economics Papers: this item is included in nep-cse, nep-geo, nep-ino, nep-knm, nep-sbm, nep-tid and nep-ure
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