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R&D and Foreign Sales in Multinationals: A Simultaneous Relationship?

Author

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  • Fors, Gunnar

    (Research Institute of Industrial Economics (IFN))

  • Svensson , Roger

    (Research Institute of Industrial Economics (IFN))

Abstract

This paper analyzes the simultaneous relationship between R&D and foreign sales in Swedish multinational enterprises in the manufacturing sector. We argue that this two-way relationship should especially apply to multinationals based in small open economies due to the firms' high dependence on foreign markets. The only previous study addressing this issue used data on multinationals originating from the United States, a country with a large domestic market, and it did not find evidence of the hypothesized simultaneous relationship. Our empirical results suggest a positive and significant effect in both directions.

Suggested Citation

  • Fors, Gunnar & Svensson , Roger, 1996. "R&D and Foreign Sales in Multinationals: A Simultaneous Relationship?," Working Paper Series 457, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0457
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    More about this item

    Keywords

    R&D; Foreign Sales; Multinational Enterprises;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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