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Foreign and domestic R&D investment

Author

Listed:
  • Rene Belderbos
  • Kyoji Fukao
  • Tomoko Iwasa

Abstract

A considerable share of R&D investment is due to multinational firms that simultaneously operate R&D bases at home and abroad. We develop a simple model of foreign and domestic R&D investment and test the model's predictions on a sample of 146 Japanese multinational firms' R&D investments in Japan and the United States in 1996. The empirical results confirm that the foreign to domestic R&D ratio depends on relative technological opportunities and relative demand conditions, with foreign research expenditures responding to technological opportunity and foreign development expenditures responding to demand.

Suggested Citation

  • Rene Belderbos & Kyoji Fukao & Tomoko Iwasa, 2009. "Foreign and domestic R&D investment," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(4), pages 369-380.
  • Handle: RePEc:taf:ecinnt:v:18:y:2009:i:4:p:369-380
    DOI: 10.1080/10438590802172404
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    References listed on IDEAS

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    1. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level," Papiers d'Economie Mathématique et Applications 98.15, Université Panthéon-Sorbonne (Paris 1).
    2. John Cantwell & José Molero (ed.), 2003. "Multinational Enterprises, Innovative Strategies and Systems of Innovation," Books, Edward Elgar Publishing, number 3182.
    3. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    4. von Zedtwitz, Maximilian & Gassmann, Oliver, 2002. "Market versus technology drive in R&D internationalization: four different patterns of managing research and development," Research Policy, Elsevier, vol. 31(4), pages 569-588, May.
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    Citations

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    Cited by:

    1. Nepelski, Daniel & De Prato, Giuditta, 2011. "Internationalisation of ICT R&D in Asia vis a vis the world regions," MPRA Paper 39281, University Library of Munich, Germany.
    2. Giuditta Prato & Daniel Nepelski, 2014. "Global technological collaboration network: network analysis of international co-inventions," The Journal of Technology Transfer, Springer, vol. 39(3), pages 358-375, June.
    3. Gary A.S. Cook & Hans Lööf & Naresh R. Pandit & Börje Johansson, 2012. "The influence of clustering on MNE location and innovation in Great Britain," Chapters,in: Entrepreneurship, Social Capital and Governance, chapter 3, pages 53-82 Edward Elgar Publishing.
    4. Chih‐Hai Yang & Yi‐Yin Wu & Hui‐Lin Lin, 2010. "Outward Investment To China And Local Innovation Of Taiwanese Manufacturing Firms," The Japanese Economic Review, Japanese Economic Association, vol. 61(4), pages 538-557, December.
    5. Hall, Bronwyn H., 2011. "The internationalization of R&D," MERIT Working Papers 049, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Vandana Ujjual & Parimal Patel & Rishikesha T. Krishnan & Srivardhini Keshavamurthy & RueyLin Hsiao & Frank Yan Zhao, 2011. "Management and Organisation of Knowledge Creation in Emerging Markets: a Perspective from subsidiaries of EU MNEs," SPRU Working Paper Series 192, SPRU - Science Policy Research Unit, University of Sussex Business School.
    7. Giuditta De Prato & Daniel Nepelski, 2012. "Global R&D network. A network analysis of international R&D centres," JRC Working Papers JRC79478, Joint Research Centre (Seville site), revised Nov 2012.
    8. Kyoji Fukao, 2013. "Explaining Japan's Unproductive Two Decades," Asian Economic Policy Review, Japan Center for Economic Research, vol. 8(2), pages 193-213, December.

    More about this item

    Keywords

    R&D; multinational firms; foreign direct investment;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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