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Determinants of MNE Subsidiaries Decision to Set up Own R&D Laboratories: The Choice of Region

In: Innovation, Growth and Competitiveness

Author

Listed:
  • Constantina Kottaridi

    (University of Peloponnese, School of Management and Economics)

  • Marina Papanastassiou

    (Copenhagen Business School
    Háskólinn á Bifröst)

  • Christos Pitelis

    (University of Cambridge)

Abstract

We test for the determinants of Multinational Enterprise (MNE) headquarters decisions to augment the innovative capabilities of the MNE group by granting mandates to their subsidiaries to set-up own R&D labs in UK regions, using a unique primary data set. Our findings suggest that the best predictor for a subsidiary receiving a mandate, is the strength of its ‘productive opportunity’ (the interaction between internal competencies and external environment). We employ a measure that augments the external environment to include regional agglomeration characteristics. Our findings highlight the importance of subsidiary, industry and locational characteristics, as well as MNE strategy to leverage subsidiary skills in determining the location of R&D activity in the global economy and in enhancing MNE innovative potential.

Suggested Citation

  • Constantina Kottaridi & Marina Papanastassiou & Christos Pitelis, 2011. "Determinants of MNE Subsidiaries Decision to Set up Own R&D Laboratories: The Choice of Region," Advances in Spatial Science, in: Peter Nijkamp & Iulia Siedschlag (ed.), Innovation, Growth and Competitiveness, chapter 0, pages 235-257, Springer.
    • Handle: RePEc:spr:adspcp:978-3-642-14965-8_11
    DOI: 10.1007/978-3-642-14965-8_11
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