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Ethnic Innovation and U.S. Multinational Firm Activity

Author

Listed:
  • C. Fritz Foley

    () (Harvard Business School, Harvard University, Boston, Massachusetts 02163; and National Bureau of Economic Research, Cambridge, Massachusetts 02138)

  • William R. Kerr

    () (Harvard Business School, Harvard University, Boston, Massachusetts 02163; and National Bureau of Economic Research, Cambridge, Massachusetts 02138)

Abstract

This paper studies the impact that ethnic innovators have on the global activities of U.S. firms by analyzing detailed data on patent applications and on the operations of the foreign affiliates of U.S. multinational firms. The results indicate that increases in the share of a firm's innovation performed by inventors of a particular ethnicity are associated with increases in the share of that firm's affiliate activity in countries related to that ethnicity. Ethnic innovators also appear to facilitate the disintegration of innovative activity across borders and to allow U.S. multinationals to form new affiliates abroad without the support of local joint venture partners. This paper was accepted by Bruno Cassiman, business strategy.

Suggested Citation

  • C. Fritz Foley & William R. Kerr, 2013. "Ethnic Innovation and U.S. Multinational Firm Activity," Management Science, INFORMS, vol. 59(7), pages 1529-1544, July.
  • Handle: RePEc:inm:ormnsc:v:59:y:2013:i:7:p:1529-1544
    DOI: 10.1287/mnsc.1120.1684
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    File URL: http://dx.doi.org/10.1287/mnsc.1120.1684
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    References listed on IDEAS

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    More about this item

    Keywords

    foreign direct investment; technology transfer; patents; innovation; research and development; ethnic networks; diasporas;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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