Where to Locate Innovative Activities in Global Value Chains. Does Co-location Matter?

Rene Belderbos, Leo Sleuwaegen, Dieter Somers and Koen De Backer

No 552861, Working Papers of Department of Management, Strategy and Innovation, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven

Abstract: With the emergence of global value chains (GVCs), production processes are increasingly fragmented and dispersed across different countries. Although many MNEs still exhibit an important ‘home bias’ in their global innovation activities, a growing number of firms have offshored R&D and innovative activities to foreign locations. Is the more recent offshoring of R&D and innovation linked to the prior waves of manufacturing offshoring? The fear in OECD economies is that because of co-location effects between production and innovative activities, the loss of certain manufacturing/assembly activities may result in a loss of innovative capabilities (R&D, design, etc.) in the longer-term. The offshoring of R&D and innovation within GVCs poses new challenges to economic policy in OECD and emerging economies. For example, how can countries attract inward R&D investments by foreign MNEs? Should outward R&D investments by MNEs be a concern for the countries in which the MNEs are headquartered?

Date: 2016-07-12
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Published in OECD Science, Technology and Industry Policy Papers , volume 30

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Related works:
Working Paper: Where to Locate Innovative Activities in Global Value Chains: Does Co-location Matter? (2016)
Working Paper: Where to Locate Innovative Activities in Global Value Chains: Does Co-location Matter? (2016)
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