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Foreign R&D satellites as a medium for the international diffusion of knowledge

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  • Joel Blit

Abstract

I examine the extent to which foreign R&D satellites of multinational firms act as a medium for the international diffusion of knowledge. Using patents from the United States Patent and Trademark Office, I compare the frequency with which headquarters patents are cited by third-party firms in the satellite's host country relative to a control group of patents, and this both before and after the establishment of the satellite (using a difference-in-differences approach). The results suggest that the satellite increases the flow of knowledge from the multinational's headquarters to firms in the satellite's host country. This satellite effect on knowledge diffusion is largest in host countries and sectors with strong but not world-class capabilities that have both the motivation and absorptive capacity to learn from foreign parties. The findings also suggest that knowledge diffusion is greatest when satellites are staffed with inventors that have previously either patented with other local firms (thus having stronger local social networks) or with the headquarters (thus having headquarters knowledge).

Suggested Citation

  • Joel Blit, 2018. "Foreign R&D satellites as a medium for the international diffusion of knowledge," Canadian Journal of Economics, Canadian Economics Association, vol. 51(4), pages 1118-1150, November.
    • Handle: RePEc:cje:issued:v:51:y:2018:i:4:p:1118-1150
    DOI: 10.1111/caje.12359
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    Cited by:

    1. Riccardo Crescenzi & Arnaud Dyèvre & Frank Neffke, 2022. "Innovation Catalysts: How Multinationals Reshape the Global Geography of Innovation," Economic Geography, Taylor & Francis Journals, vol. 98(3), pages 199-227, May.
    2. Liang, Yousha & Shi, Kang & Tao, Hanyi & Xu, Juanyi, 2024. "Learning by exporting: Evidence from patent citations in China," Journal of International Economics, Elsevier, vol. 150(C).
    3. Ángel Calvo, 2022. "Japanese ICT multinationals in Southern Europe by the end of the twentieth century: Fujitsu in Spain," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 1341-1373, June.
    4. Gong, Robin Kaiji, 2023. "The local technology spillovers of multinational firms," Journal of International Economics, Elsevier, vol. 144(C).
    5. Riccardo Crescenzi & Arnaud Dyèvre & Frank Neffke, 2020. "Innovation catalysts - How multinationals reshape the global geography of innovation," Papers in Evolutionary Economic Geography (PEEG) 2016, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Mar 2020.

    More about this item

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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