Location and network determinants of technology seeking versus technology exploiting FDI
AbstractThe nature and economic effects of innovation activities of foreign affiliates of multinational enterprises (MNEs) on their host countries is a popular topic in the current literature on the globalization of technology. In general, firms have different motives for expanding into foreign markets, including the sourcing of low-cost factors of production, the search for markets, the avoidance of taxes, etc. (Chung and Alcacer, 2002). In addition to these traditional, knowledge- and asset-exploiting motives, more recent work has analyzed the motives for and magnitude of knowledge or asset-seeking investment motives, focusing on the importance of R&D and innovation (see for instance Kuemmerle, 1999; Narula and Zanfei, 2004). In fact, the incessant search by MNEs for sustainable competitive advantage has led to an increasing attention to the strategies of affiliates of these multinational companies. As part of this process, proactive MNEs seek –and the reactive ones are forced to seek– a variety of ways in which their foreign affiliates can help increase the vibrancy of corporate strategy (Bartlett and Ghoshal, 1986). Subsidiary companies have been shown to be able to contribute to the competitive advantages of the MNE (Birkinshaw, et al., 1998) and even develop subsidiary-specific advantages (Moore and Heeler, 1998; Rugman and Verbeke, 2001). Headquarters are no longer seen as the brains of the firm. Instead, the MNE is conceptualised as a brain (Hedlund and Rolander, 1990). The different subsidiaries have specific roles and strategies in the context of the MNE as a differentiated network. The purpose of the current paper is twofold. First, we develop a taxonomy of subsidiaries , allowing us to distinguish different motivations for foreign investment in R&D. Unlike earlier research, we exploit unique and detailed information on foreign subsidiaries’ innovative performance to distinguish between different types of foreign subsidiary. Second, we investigate the characteristics of these firms . Apart from subsidiary- and parent-specific variables, we further allow locations (within Belgium) to differ in their attractiveness for FDI of a particular type.
Download InfoIf 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.
Bibliographic InfoPaper provided by Katholieke Universiteit Leuven in its series Open Access publications from Katholieke Universiteit Leuven with number urn:hdl:123456789/381175.
Date of creation: 2011
Date of revision:
Contact details of provider:
Web page: http://www.kuleuven.be
Other versions of this item:
- Van Beveren, Ilke & De Beule, Filip, 2011. "Location and network determinants of technology-seeking versus technology-exploiting FDI," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/336007, Katholieke Universiteit Leuven.
- De Beule, Filip & Van Beveren, Ilke, 2011. "Location and network determinants of technology seeking versus technology exploiting FDI," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/385060, Katholieke Universiteit Leuven.
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.:
- Rachel Griffith & Rupert Harrison & John Van Reenen, 2004.
"How special is the special relationship? Using the impact of US R&D spillovers on UK firms as a test of technology sourcing,"
IFS Working Papers
W04/32, Institute for Fiscal Studies.
- John Van Reenen & Rupert Harrison & Rachel Griffith, 2006. "How Special Is the Special Relationship? Using the Impact of U.S. R&D Spillovers on U.K. Firms as a Test of Technology Sourcing," American Economic Review, American Economic Association, vol. 96(5), pages 1859-1875, December.
- Rachel Griffith & Rupert Harrison & John Van Reenen, 2004. "How Special is the Special Relationship? Using the Impact of US R&D Spillovers on UK Firms as a Test of Technology Sourcing," CEP Discussion Papers dp0659, Centre for Economic Performance, LSE.
- Griffith, Rachel & Harrison, Rupert & Van Reenen, John, 2004. "How Special is the Special Relationship? Using the Impact of US R&D Spillovers on UK Firms as a Test of Technology Sourcing," CEPR Discussion Papers 4698, C.E.P.R. Discussion Papers.
- Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
- Bruno Van Pottelsberghe & Frank Lichtenberg, 2001.
"Does foreign direct investment transfer technology across borders?,"
ULB Institutional Repository
2013/6221, ULB -- Universite Libre de Bruxelles.
- Bruno Van Pottelsberghe De La Potterie & Frank Lichtenberg, 2001. "Does Foreign Direct Investment Transfer Technology Across Borders?," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 490-497, August.
- Kirsi Mukkala, 2004. "Agglomeration economies in the finnish manufacturing sector," Applied Economics, Taylor & Francis Journals, vol. 36(21), pages 2419-2427.
- Nigel Driffield & James H Love, 2007. "Linking FDI motivation and host economy productivity effects: conceptual and empirical analysis," Journal of International Business Studies, Palgrave Macmillan, vol. 38(3), pages 460-473, May.
- Gupta, Anil K. & Govindarajan, V., 1994. "Organizing for knowledge flows within MNCs," International Business Review, Elsevier, vol. 3(4), pages 443-457, December.
- Filip De Beule & Ilke Van Beveren, 2012. "Does Firm Agglomeration Drive Product Innovation And Renewal? An Application For Belgium," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 103(4), pages 457-472, 09.
- Julian Birkinshaw & Neil Hood, 2000. "Characteristics of Foreign Subsidiaries in Industry Clusters," Journal of International Business Studies, Palgrave Macmillan, vol. 31(1), pages 141-154, March.
- Wilbur Chung & Juan Alcácer, 2002. "Knowledge Seeking and Location Choice of Foreign Direct Investment in the United States," Management Science, INFORMS, vol. 48(12), pages 1534-1554, December.
- Kendall Roth & Allen J Morrison, 1992. "Implementing Global Strategy: Characteristics of Global Subsidiary Mandates," Journal of International Business Studies, Palgrave Macmillan, vol. 23(4), pages 715-735, December.
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carl Demeyere).
If references are entirely missing, you can add them using this form.