Advanced Search
MyIDEAS: Login

Strategic R&D location by multinational firms: Spillovers, technology sourcing, and competition

Contents:

Author Info

  • Belderbos, Rene
  • Lykoianni, E
  • Veugelers, Reinhilde

Abstract

We analyze strategic interaction in R&D internationalization decisions by two multinational firms competing both abroad and in their home markets and examine different incentives for foreign R&D faced by technology leaders and technology laggards. The model takes into account the impact of local inter-firm R&D spillovers, (non-costless) international intra-firm transfer of knowledge, and the notion that internal R&D increases the effectiveness of incoming spillovers. Greater efficiency of intra-firm transfers and greater spillovers increases the attractiveness of home R&D to the technology leader. The lagging firm in contrast increases the share of foreign R&D as overseas technology sourcing becomes more effective. Greater product market competition encourages the leading firm to engage in foreign R&D to capture a larger share of profits on the foreign market, while laggards concentrate more R&D at home to defend their home market position. The country with a stricter intellectual property rights regime attracts a larger shares of R&D by both leader and laggard.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: https://lirias.kuleuven.be/bitstream/123456789/228402/1/0533.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Katholieke Universiteit Leuven in its series Open Access publications from Katholieke Universiteit Leuven with number urn:hdl:123456789/228402.

as in new window
Length:
Date of creation: 2005
Date of revision:
Handle: RePEc:ner:leuven:urn:hdl:123456789/228402

Contact details of provider:
Web page: http://www.kuleuven.be

Related research

Keywords: Competition; Country; Intellectual property; Incentives; Multinational firms; R&D;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Luís M. B. Cabral, 2003. "R&D Competition when firms Choose Variance," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(1), pages 139-150, 03.
  2. Leahy, Dermot & Neary, J Peter, 2004. "Absorptive Capacity, R&D Spillovers and Public Policy," CEPR Discussion Papers 4171, C.E.P.R. Discussion Papers.
  3. Walter Kuemmerle, 1999. "The Drivers of Foreign Direct Investment into Research and Development: An Empirical Investigation," Journal of International Business Studies, Palgrave Macmillan, vol. 30(1), pages 1-24, March.
  4. Georges SIOTIS, 1996. "Foreign Direct Investment Strategies and Firms' Capabilities," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 9626, Université de Lausanne, Faculté des HEC, DEEP.
  5. Bjorvatn, K. & Eckel, C., 2001. "Technology Sourcing and Strategic Foreign Direct Investment," Papers 28/2001, Norwegian School of Economics and Business Administration-.
  6. Kumar, Nagesh, 1996. "Intellectual property protection, market orientation and location of overseas R&D activities by multinational enterprises," World Development, Elsevier, vol. 24(4), pages 673-688, April.
  7. Cadot, Olivier & Desruelle, Dominique, 1998. "R&D: Who does the R, who does the D?," Journal of International Economics, Elsevier, vol. 46(1), pages 87-103, October.
  8. Jaffe, A.B. & Trajtenberg, M., 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," Papers 14-92, Tel Aviv.
  9. David Pérez-Castrillo & Bruno Cassiman & Reinhilde Veugelers, 2000. "Endogeneizing know-how flows through the nature of R&D investments," UFAE and IAE Working Papers 464.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  10. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-96, September.
  11. Bas, Christian Le & Sierra, Christophe, 2002. "'Location versus home country advantages' in R&D activities: some further results on multinationals' locational strategies," Research Policy, Elsevier, vol. 31(4), pages 589-609, May.
  12. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-40, June.
  13. Lee Branstetter, 2000. "Is Foreign Direct Investment a Channel of Knowledge Spillovers? Evidence from Japan's FDI in the United States," NBER Working Papers 8015, National Bureau of Economic Research, Inc.
  14. Norback, P.-J., 1999. "Multinational Firms, Technology and Location," Research Institute of Industrial Economics Working Papers 512, Research Institute of Industrial Economics (IFN).
  15. Odagiri, Hiroyuki & Yasuda, Hideto, 1996. "The determinants of overseas R&D by Japanese firms: an empirical study at the industry and company levels," Research Policy, Elsevier, vol. 25(7), pages 1059-1079, October.
  16. Belderbos, Rene, 2001. "Overseas innovations by Japanese firms: an analysis of patent and subsidiary data," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/100664, Katholieke Universiteit Leuven.
  17. Petit, Maria-Luisa & Sanna-Randaccio, Francesca, 2000. "Endogenous R&D and foreign direct investment in international oligopolies," International Journal of Industrial Organization, Elsevier, vol. 18(2), pages 339-367, February.
  18. Belderbos, Rene & Kyoji, F & Tomoko, I, 2006. "Domestic and foreign R&D investment," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/120967, Katholieke Universiteit Leuven.
  19. Belderbos, Rene, 2003. "Entry mode, organizational learning, and R&D in foreign affiliates: Evidence from Japanese firms," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/101128, Katholieke Universiteit Leuven.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Kashefi, Mohammad Ali, 2011. "The effect of vertical knowledge spillovers via the supply chain on location decision of firms," MPRA Paper 31743, University Library of Munich, Germany, revised 20 May 2011.
  2. René Belderbos & Elissavet Lykogianni & Reinhilde Veugelers, 2008. "Strategic R&D Location in European Manufacturing Industries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 144(2), pages 183-206, July.
  3. Hall, Bronwyn H., 2011. "The internationalization of R&D," UNU-MERIT Working Paper Series 049, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology.
  4. Carlo Altomonte & Enrico Pennings, 2005. "Testing for Marginal Spillovers from Foreign Direct Investment," Tinbergen Institute Discussion Papers 05-101/4, Tinbergen Institute.
  5. Bárcena Ruiz, Juan Carlos & Garzón San Felipe, María Begoña, 2011. "Relocation and Investment in R&D by Firms," IKERLANAK 2011-52, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
  6. René Belderbos, 2006. "R&D Activities in East Asia by Japanese, European, and US Multinationals," Microeconomics Working Papers 21887, East Asian Bureau of Economic Research.
  7. Alessia Pisoni & Alberto Onetti & Luciano Fratocchi & Marco Talaia, 2010. "Managing R&D activities in the Italian red biotech industry. A comparison between Italian independent firms and multinational companies," Economics and Quantitative Methods qf1003, Department of Economics, University of Insubria.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ner:leuven:urn:hdl:123456789/228402

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carl Demeyere).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.