The Gravity of Cross-border R&D Expenditure
AbstractWhile up to the 1990s, R&D was still ‘an important case of non-globalization’ (Patel and Pavitt 1991), the internationalization of business R&D activities has accelerated significantly during the past two decades. R&D activities of foreign affiliates have become one of the most dynamic elements of the process of globalization. Until recently, the main recipients of cross-border R&D expenditure were developed countries, though new players have emerged lately, particularly in Asia. Against that backdrop, the paper applies a recently compiled novel data set on R&D expenditure of foreign-owned firms in the manufacturing sectors of a set of OECD countries and identifies specific home- and host-country characteristics that are conducive or obstructive to cross-border R&D expenditure of foreign affiliates. The results point to the pivotal role of market size and of cultural, physical and technological proximity for R&D efforts of foreign-owned firms. Moreover, the analysis demonstrates that sufficient human capital and strong indigenous technological capabilities in the host country tend to be conducive to R&D activities of foreign affiliates. In contrast, a rich human capital base in the home country is obstructive to the process of R&D internationalization. Geographic distance turns out to be a strong deterrent.
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 The Vienna Institute for International Economic Studies, wiiw in its series wiiw Working Papers with number 91.
Length: 24 pages including 5 Tables and 4 Figures
Date of creation: Jul 2012
Date of revision:
Publication status: Published as wiiw Working Paper
Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- L6 - Industrial Organization - - Industry Studies: Manufacturing
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Customer service).
If references are entirely missing, you can add them using this form.