R&D intensity for innovative and adaptive purposes in overseas subsidiaries: Evidence from Japanese multinational enterprises
AbstractThis paper investigates the causes of R&D activities of overseas subsidiaries using firm-level panel data for Japanese multinationals. We distinguish between overseas innovative R&D (basic and applied research) and adaptive R&D (development and design) and examine how the intensity of each type of R&D is determined, using Amemiya Generalized Least Squares estimation. Our findings suggest that overseas innovative R&D aims at the exploitation of foreign knowledge, whereas adaptive R&D has no such aim. In addition, the size of the host country's market positively affects both types, whereas geographic distance between the host and the home country has a negative impact. Finally, the parent firm's knowledge is found to increase the size of overseas adaptive R&D but not innovative R&D. Based on a theoretical model, we interpret this evidence as showing that knowledge of the parent firm is not fully utilized in innovative R&D of its subsidiary.
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Bibliographic InfoArticle provided by Elsevier in its journal Research in International Business and Finance.
Volume (Year): 23 (2009)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/ribaf
Overseas R& D activities Multinational enterprises Total factor productivity;
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- Lahiri, Poulomi & Chakraborty, Indrani, 2014. "Explaining dividend gap between R&D and non-R&D Indian companies in the post-reform period," Research in International Business and Finance, Elsevier, vol. 30(C), pages 268-283.
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