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Trends in the Internationalisation of R&D: The German Perspective

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  • Marian Beise
  • Heike Belitz

Abstract

In this paper we present latest facts about the R&D activities of German multinational companies abroad and R&D activities of foreign companies in Germany. These results confirm that Germany is still an attractive location for R&D activites of multinational companies in many technological fields. However, the internationalisation of R&D is closely linked with the internationalisation of sales and production. In the commonly accepted eclectic theoretical approach by Dunning direct investment is pushed by companies that have advantages over their competitors in the host countries, where also attractive locational advantages exist. Since R&D is a source of both ownership and locational advantages, it was suggested earlier that instead of owning a technological advantage, companies with technological weaknesses start R&D in countries, which possess a technological advantage, to get access to new technologies. In contrast we found that German firms prefer to do R&D abroad in technological fields in which they hold a technological lead, e.g. in chemicals, pharmaceuticals and motor vehicles, but that they tend to perform R&D in countries which are also strong in these fields. Our results suggest that in most cases it is not the technological superiority of the host country itself which is the decisive locational advantage to attract multinationals' R&D but the lead-market function of that country or region.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.38517.de/dp167.pdf
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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 167.

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Length: 31 p.
Date of creation: 1998
Date of revision:
Handle: RePEc:diw:diwwpp:dp167

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Keywords: Multinational company; R&D; Internationalisation;

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References

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  1. Patel, Pari & Vega, Modesto, 1999. "Patterns of internationalisation of corporate technology: location vs. home country advantages1," Research Policy, Elsevier, vol. 28(2-3), pages 145-155, March.
  2. Cantwell, John, 1995. "The Globalisation of Technology: What Remains of the Product Cycle Model?," Cambridge Journal of Economics, Oxford University Press, vol. 19(1), pages 155-74, February.
  3. Beckmann, Christoph, 1997. "Internationalisierung von Forschung und Entwicklung in multinationalen Unternehmen," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 1146, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
  4. Barrell, Ray & Pain, Nigel, 1997. "Foreign Direct Investment, Technological Change, and Economic Growth within Europe," Economic Journal, Royal Economic Society, vol. 107(445), pages 1770-86, November.
  5. Heike Belitz & Marian Beise, 1995. "Internationalization of Research and Development in Multinational Corporations in the Federal Republic of Germany," Discussion Papers of DIW Berlin 106, DIW Berlin, German Institute for Economic Research.
  6. Pari Patel & Keith Pavitt, 1991. "Large Firms in the Production of the World’s Technology: An Important Case of “Non-Globalisation”," Journal of International Business Studies, Palgrave Macmillan, vol. 22(1), pages 1-21, March.
  7. Bruno Van Pottelsberghe & Frank Lichtenberg, 1998. "International R&D spillovers comment," ULB Institutional Repository 2013/6233, ULB -- Universite Libre de Bruxelles.
  8. Venables, Anthony J, 1996. "Localization of Industry and Trade Performance," Oxford Review of Economic Policy, Oxford University Press, vol. 12(3), pages 52-60, Autumn.
  9. Pain, Nigel, 1997. "Continental Drift: European Integration and the Location of U.K. Foreign Direct Investment," The Manchester School of Economic & Social Studies, University of Manchester, vol. 65(0), pages 94-117, Supplemen.
  10. Heike Belitz, 1996. "Internationalisierung von Forschung und Entwicklung in multinationalen Unternehmen," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 63(16), pages 258-266.
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Cited by:
  1. Tiwari, Rajnish & Herstatt, Cornelius, 2011. "Lead market factors for global innovation: Emerging evidence from India," Working Papers 61, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.
  2. Tiwari, Rajnish & Herstatt, Cornelius, 2012. "India - a lead market for frugal innovations? Extending the lead market theory to emerging economies," Working Papers 67, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.
  3. Tiwari, Rajnish & Herstatt, Cornelius, 2011. "Role of "Lead Market" factors in globalization of innovation: Emerging evidence from India & its implications," Working Papers 64, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.

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