Overseas R&D Activities by Multinational Enterprises: Evidence from Japanese Firm-Level Data

Yasuyuki Todo and Satoshi Shimizutani

Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: This paper investigates both the determinants and the impact of overseas subsidiaries' R&D activities, using firm-level panel data for Japanese multinational enterprises. We distinguish between overseas innovative and adaptive R&D and find substantial differences between the two types of R&D. The evidence suggests that overseas innovative R&D aims at the exploitation of foreign advanced knowledge, and by doing so, it helps to raise the productivity of the parent firm. In contrast, the primary role of overseas adaptive R&D is to enhance the productivity of overseas subsidiaries through the use of parent firms' knowledge. In addition, we find no complementarity between home and overseas innovative R&D, i.e., no evidence that overseas innovative R&D raises the marginal effect of home R&D on home productivity.

Keywords: overseas R&D activities; multinational enterprises; total factor productivity (search for similar items in EconPapers)
JEL-codes: F23 O30 (search for similar items in EconPapers)
Date: 2005-05
New Economics Papers: this item is included in nep-dev, nep-ino and nep-sea
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:hst:hstdps:d05-91

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