Multinationality, R&D and Productivity Evidence from the top R&D investors worldwide

Davide Castellani, Sandro Montresor (), Torben Schubert () and Antonio Vezzani
Additional contact information
Torben Schubert: Fraunhofer Institute

No 2015-04, JRC Working Papers on Corporate R&D and Innovation from Joint Research Centre

Abstract: The paper investigates the impact that the multinational scope of firms' activities can have on their productivity. First, we argue that such an impact is both direct and indirect, and that the latter is channelled through higher incentives to invest in R&D. Second, we posit that the composition of these direct and indirect effects is different if multinationality is measured at the intensive margin (higher share of multinational on total activities) rather than at the extensive margin (greater geographical dispersion of multinational activities). Using a large sample of top R&D investors in the world, we propose an econometric model based on an R&D and a productivity equation, which are both allowed to depend on multinationality. With this model we can disentangle the direct and indirect effects of multinationality on productivity appropriately. We find: i) a positive direct impact of multinational intensity on productivity, while the geographical dispersion of multinationality is negatively correlated with productivity; ii) multinationality (along both dimensions) has a positive indirect impact through higher investments in R&D; iii) this positive indirect effect is however not large enough to compensate the negative direct one at the extensive margin. Results are largely consistent with a theoretical approach that combines transaction cost theory with an economic analysis of how incentives to invest in R&D depend on multinationality.

Keywords: Multinationality; R&D; Productivity; Europe (search for similar items in EconPapers)
JEL-codes: F23 F61 O32 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2015
New Economics Papers: this item is included in nep-cse, nep-eff and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://iri.jrc.ec.europa.eu/sites/default/files/c ... tors%20worldwide.pdf (application/pdf)

Related works:
Journal Article: Multinationality, R&D and productivity: Evidence from the top R&D investors worldwide (2017)
Working Paper: Multinationality, R&D and Productivity: Evidence from the top R&D investors worldwide (2016)
Working Paper: Multinationality, R&D and productivity: Evidence from the top R&D investors worldwide (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ipt:wpaper:201504

Access Statistics for this paper

More papers in JRC Working Papers on Corporate R&D and Innovation from Joint Research Centre Contact information at EDIRC.
Bibliographic data for series maintained by Publication Officer ().