How Do Different Motives for R&D Investment in Foreign Locations Affect Domestic Firm Performance?

Spyros Arvanitis and Heinz Hollenstein ()

No 10-258, KOF Working papers from KOF Swiss Economic Institute, ETH Zurich

Abstract: The aim of this article is to investigate the differences between specific motives of R&D investment in foreign locations with respect to the factors influencing the likelihood of foreign R&D and to the impact of foreign presence on the parent firms' innovativeness and productivity. An econometric analysis of Swiss firm panel data shows, firstly, that factors related to firm-specific knowledge-oriented advantages are more important for explaining the likelihood of foreign R&D activities than factors reflecting disadvantages related to home location. Secondly, knowledge-oriented motives of foreign R&D are positively correlated to innovation performance of domestic firms, whereas market-oriented and resource-oriented strategies correlate positively with productivity.

Keywords: Research and development (R&D); Foreign R&D; Motives of foreign R&D; Home effects of foreign R&D; Firm performance (search for similar items in EconPapers)
Pages: 41 pages
Date: 2010-05
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Persistent link: https://EconPapers.repec.org/RePEc:kof:wpskof:10-258

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