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Unbundling R&D and Manufacturing: Postindustrial Myth or Economic Reality?

  • Mikko Ketokivi
  • Jyrki Ali-Yrkkö

Understanding determinants of business location decisions is important from the point of view of economic policy. While the determinants of manufacturing and R&D location have been extensively covered in the literature, in this article we examine a largely neglected question: Under what conditions do manufacturing and R&D have to be physically colocated, that is, when is unbundling the two impossible? In a sample of 241 Finnish industrial firms, we find that unbundling R&D and manufacturing is possible for some companies but indeed a postindustrial myth of sorts for many others. The need for colocation correlates with knowledge intensity of activities: product complexity, process complexity, and industry rate of change, but interestingly enough, not with the size of the firm's R&D budget. Copyright 2009 by The Policy Studies Organization.

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Article provided by Policy Studies Organization in its journal Review of Policy Research.

Volume (Year): 26 (2009)
Issue (Month): 1-2 (01)
Pages: 35-54

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Handle: RePEc:bla:revpol:v:26:y:2009:i:1-2:p:35-54
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