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Context and the role of policies to attract foreign R&D in Europe

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  • Andrés Rodríguez-Pose
  • Callum Wilkie

Abstract

This paper explores the effectiveness of policies ‘in’ attracting the foreign research and development (R&D) of multinational enterprises (MNEs) to specific countries in Europe. We develop a macroeconomic investigation covering 29 European countries during the period between 1990 and 2012 in order to address: (a) whether the provision of direct financial support for business R&D is effective for the attraction of foreign R&D; (b) whether direct support is more effective than indirect support for this purpose and (c) whether the link between direct financial support for business R&D and the foreign R&D of MNEs is conditioned by the context within which the support is provided. The results of the analysis show that, first, the provision of direct financial support is generally effective for the attraction of foreign R&D by MNEs. Second, direct support for business R&D is more effective for this purpose than indirect support. Third, the provision of direct financial support for business R&D yields greater returns in contexts that are more socio-economically suitable for knowledge-intensive, innovative activity.

Suggested Citation

  • Andrés Rodríguez-Pose & Callum Wilkie, 2016. "Context and the role of policies to attract foreign R&D in Europe," European Planning Studies, Taylor & Francis Journals, vol. 24(11), pages 2014-2035, November.
    • Handle: RePEc:taf:eurpls:v:24:y:2016:i:11:p:2014-2035
    DOI: 10.1080/09654313.2016.1226783
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    Cited by:

    1. Lenihan, Helena & Mulligan, Kevin & Doran, Justin & Rammer, Christian & Ipinnaiye, Olubunmi, 2022. "R&D grant and tax credit support for foreign-owned subsidiaries: Does it pay off?," ZEW Discussion Papers 22-003, ZEW - Leibniz Centre for European Economic Research.
    2. Diego Sande Veiga, 2025. "Analysis of the results of the regional innovation policies of the structural funds on business innovation indicators: does size and role matter in Andalusian business performance indicators?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 74(1), pages 1-29, March.
    3. Helena Lenihan & Kevin Mulligan & Justin Doran & Christian Rammer & Olubunmi Ipinnaiye, 2024. "R&D grants and R&D tax credits to foreign-owned subsidiaries: Does supporting multinational enterprises’ R&D pay off in terms of firm performance improvements for the host economy?," The Journal of Technology Transfer, Springer, vol. 49(2), pages 740-781, April.
    4. Colin Davis & Ken‐ichi Hashimoto, 2025. "R&D Subsidies, Innovation Location, and Productivity Growth," Review of International Economics, Wiley Blackwell, vol. 33(4), pages 911-920, September.
    5. Gary Sands & Pierre Filion & Laura A. Reese, 2020. "Techs and the Cities: A New Economic Development Paradigm?," Urban Planning, Cogitatio Press, vol. 5(3), pages 392-402.
    6. Diego Sande Veiga, 2025. "Is there an impact of the Structural Funds in innovation on business performance? Analysis through the ERDF-Innterconecta programme in Andalusia," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 45(2), pages 221-245, June.
    7. Dumont, Michel, 2022. "Public support to business research and development in Belgium: fourth evaluation," MPRA Paper 115418, University Library of Munich, Germany.

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    JEL classification:

    • N0 - Economic History - - General

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