Context and the role of policies to attract foreign R&D in Europe

Andrés Rodríguez-Pose and Callum Wilkie

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper explores the effectiveness of policies ‘in’ attracting the foreign research and development (R&D) of multinational enterprises (MNEs) to specific countries in Europe. We develop a macroeconomic investigation covering 29 European countries during the period between 1990 and 2012 in order to address: (a) whether the provision of direct financial support for business R&D is effective for the attraction of foreign R&D; (b) whether direct support is more effective than indirect support for this purpose and (c) whether the link between direct financial support for business R&D and the foreign R&D of MNEs is conditioned by the context within which the support is provided. The results of the analysis show that, first, the provision of direct financial support is generally effective for the attraction of foreign R&D by MNEs. Second, direct support for business R&D is more effective for this purpose than indirect support. Third, the provision of direct financial support for business R&D yields greater returns in contexts that are more socio-economically suitable for knowledge-intensive, innovative activity.

Keywords: foreign R&D; multinational enterprises (MNEs); direct and indirect support; knowledge flows; innovation; Europe (search for similar items in EconPapers)
JEL-codes: N0 (search for similar items in EconPapers)
Date: 2016-09-20
New Economics Papers: this item is included in nep-cse, nep-ino, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published in European Planning Studies, 20, September, 2016, 24(11), pp. 2014-2035. ISSN: 0965-4313

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Journal Article: Context and the role of policies to attract foreign R&D in Europe (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:84289

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