The R&D activity of multinational enterprises in peripheral economies: evidence from the EU new member states
AbstractThis paper explores the impact of MNEs on innovation systems and the policy options available for peripheral economies to attract and embed the R&D activities of MNEs. After developing the conceptual and policy framework, we discuss the case of the new member states from Central and Eastern Europe that joined the EU between 2004 and 2007. We analyse the evolution of the R&D activity of MNE subsidiaries since the 1980s, contrasting the new member states with the core and Mediterranean countries of the EU. This analysis is useful to illustrate some common challenges for peripheral economies, including the difficulty of building linkages with MNEs in high value adding activities; the risk of crowding-out of domestic R&D following cross-border acquisitions; the risk of external dependency; and the limitations of protectionist policies. We recommend that governments of peripheral economies focus their efforts on fostering a demand-oriented upgrading of technological capabilities and on stimulating domestic linkages and clusters around MNEs, rather than seeking to attract supply-driven R&D.
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Bibliographic InfoPaper provided by United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology in its series UNU-MERIT Working Paper Series with number 048.
Date of creation: 2010
Date of revision:
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Web page: http://www.merit.unu.edu
European Union; FDI; investment; innovation systems; innovation policies; linkages; MNE; multinational enterprises; new member states; peripheral economies; R&D;
Find related papers by JEL classification:
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- P33 - Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Business, and Aid
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-25 (All new papers)
- NEP-CSE-2010-09-25 (Economics of Strategic Management)
- NEP-EUR-2010-09-25 (Microeconomic European Issues)
- NEP-INO-2010-09-25 (Innovation)
- NEP-TRA-2010-09-25 (Transition Economics)
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