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Innovation and Profitability of Global Food Firms. Testing for Differences in the Influence of the Home Base

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  • R Rama

    (Instituto de Economía y Geografia, Consejo Superior de Investigaciones Cientificas (CSIC), Pinar 25, 28006 Madrid, Spain)

Abstract

In previous research it has been assumed that the performance of enterprises in global markets, especially companies in high-tech sectors, is often associated with the amount of effort devoted to innovation by the home country. In this article I test empirically such assumptions in a low-tech sector, the food and beverage processing industry, with evidence provided by a sample of 4572 foreign patents granted to nationals from major OECD countries over 1969–88 and data on 96 major multinationals. In contrast with most previous research, this study investigates within-industry differences in the impact of the home base. My findings show that the theory is applicable to low-tech sectors. However, the impact of the home country is not homogeneous within industries, and depends on size and international experience of firms. Smaller multinational enterprises and newcomers achieving high profitability tend to be based in countries where the food and beverage national industry is technologically intensive, whereas geography is less crucial to explaining the international performance of very large companies.

Suggested Citation

  • R Rama, 1999. "Innovation and Profitability of Global Food Firms. Testing for Differences in the Influence of the Home Base," Environment and Planning A, , vol. 31(4), pages 735-751, April.
    • Handle: RePEc:sae:envira:v:31:y:1999:i:4:p:735-751
    DOI: 10.1068/a310735
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    References listed on IDEAS

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    2. Ornella W. Maietta & Cristian Barra & Roberto Zotti, 2017. "Innovation and University-Firm R&D Collaboration in the European Food and Drink Industry," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(3), pages 749-780, September.

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