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How do different drivers of R&D investment in foreign locations affect domestic firm performance? An analysis based on Swiss panel micro data

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  • Spyros Arvanitis
  • Heinz Hollenstein

Abstract

The aim of this article is to investigate the differences between specific motives of R&D investment in foreign locations with respect to: (i) the factors influencing the likelihood of foreign R&D and (ii) the impact of foreign presence on the parent firms' innovativeness and productivity. An econometric analysis of Swiss firm panel data (period 2000--2008; 2817 companies) shows, first, that factors related to firm-specific knowledge-oriented advantages are more important for explaining the likelihood of foreign R&D activities than factors reflecting disadvantages related to home location. Second, knowledge-oriented motives of foreign R&D positively influence the innovation performance of domestic firms, whereas market- and resource-oriented strategies have a positive impact on labor productivity. Copyright 2011 The Author 2011. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

Suggested Citation

  • Spyros Arvanitis & Heinz Hollenstein, 2011. "How do different drivers of R&D investment in foreign locations affect domestic firm performance? An analysis based on Swiss panel micro data," Industrial and Corporate Change, Oxford University Press, vol. 20(2), pages 605-640, April.
  • Handle: RePEc:oup:indcch:v:20:y:2011:i:2:p:605-640
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    File URL: http://hdl.handle.net/10.1093/icc/dtr006
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    Cited by:

    1. Lorena D’Agostino, 2015. "The neglected effects of R&D captive offshoring in emerging countries on the creation of knowledge at home," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(1), pages 61-91, March.
    2. Dachs, Bernhard, 2017. "Internationalisation of R&D: A Review of Drivers, Impacts, and new Lines of Research," MPRA Paper 83367, University Library of Munich, Germany.
    3. Martin Berger & Heinz Hollenstein, 2012. "Determinants of equity-based and co-operative foreign R&D and impact on the parent firm's performance," KOF Working papers 12-305, KOF Swiss Economic Institute, ETH Zurich.
    4. Jiatao Li & Zhenzhen Xie, 2016. "Governance Structure and the Creation and Protection of Technological Competencies: International R&D Joint Ventures in China," Management International Review, Springer, vol. 56(1), pages 123-148, February.
    5. Ali Murad Syed & Zahid Riaz & Abdul Waheed, 2016. "Innovation, Firm Performance And Riskiness: Evidence From The Leading Worldwide Innovative Firms," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(07), pages 1-19, October.
    6. Hollenstein, Heinz & Berger, Martin, 2015. "Choice of foreign R&D entry mode and its relation to firm performance: A firm-level analysis for Switzerland and Austria," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 9, pages 1-47.
    7. Arvanitis, Spyros & Hollenstein, Heinz & Stucki, Tobias, 2016. "Does the explanatory power of the OLI approach differ among sectors and business functions? Evidence from firm-level data," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 10, pages 1-46.
    8. Cátia Pinheiro & Paula Sarmento, 2013. "R&D offshore insourcing in Portugal: drivers and motivations," FEP Working Papers 501, Universidade do Porto, Faculdade de Economia do Porto.

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