Determinants of R&D activities of multinational firms abroad

Sandra Leitner, Bernhard Dachs and Robert Stehrer

ERSA conference papers from European Regional Science Association

Abstract: In recent years, firms have considerably decentralized their research and development (R&D) activities. Subsidiaries of foreign multinational enterprises (MNEs) are now among the top performers of R&D in many EU and non-EU countries. Specifically, MNE affiliates account for around 20% of total business R&D in France, Germany and Italy; between 30% and 50% in Canada, Portugal, the Slovak Republic, Sweden and the United Kingdom; and more than 50% in Austria, Belgium, the Czech Republic, Hungary and Ireland. Against that backdrop, the paper uses a novel and unique data base on R&D expenditure of foreign-owned firms for a set of OECD countries and identifies and analyzes factors that drive the scale of R&D expenditure across countries and sectors. The empirical analysis employs a gravity approach which demonstrates that geography plays a pivotal role as distance between host and home country of a foreign-owned firm, a common language spoken in both home and host countries, or common borders are key drivers of cross-border R&D investments. Moreover, results reveal that additional determinants such as larger host and home country markets or superior host country human capital bases are conducive to R&D expenditure of foreign-owned firms while stronger human capital bases in home countries deter R&D efforts of foreign-owned firms abroad. Keywords: internationalisation of research and development, multinational firms, gravity model JEL-codes: F23, O32, O33

Date: 2012-10
New Economics Papers: this item is included in nep-ino, nep-int and nep-knm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www-sre.wu.ac.at/ersa/ersaconfs/ersa12/e120821aFinal00198.pdf (application/pdf)

Related works:
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:wiw:wiwrsa:ersa12p196

Access Statistics for this paper

More papers in ERSA conference papers from European Regional Science Association Welthandelsplatz 1, 1020 Vienna, Austria.
Bibliographic data for series maintained by Gunther Maier ().