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Geographic Distance And R D Activities Of Subsidiaries Located In Spain

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  • Nadia AYARI

Abstract

This study investigates the impact of geographic distance between the home country of a Multinational Enterprise (MNE) and host countries where subsidiaries are located on the MNE’s decision to carry out overseas research and development (R D) activities in the host market. The analysis is based on a sample of 1,161 foreign affiliates taken from the PITEC database (Techno-logical Innovation panel), based on the 2005 survey of firms’ technological innovation activities compiled by the Spanish Statistical Institute (INE). Data allow to distinguish between internal and external R D activities of firms. I find that, in the sample of Spanish subsidiaries of foreign MNEs, geographic distance negatively affects the likelihood of affiliates sourcing external R D, but not that of carrying out internal R D. Furthermore, the results also show that, conditional on doing external R D, the greater the distance between the source and the host countries, the lower the probability of subsidiaries procuring R D from local sources in the host country. Resume - Cette etude examine l’impact de la distance geographique entre le pays d’origine des firmes multinationales et le pays où sont situees leurs filiales sur leur decision d’entreprendre des activites de Recherche et Developpement (R D). L’analyse utilise un echantillon de 1161 filiales etrangeres installees en Espagne collectees à partir de la base de donnees PITEC (Panel d’Innovation Technologique), fondee sur le questionnaire de l’annee 2005 sur l’activite d’innovation technologique des firmes de l’Institut Espagnol de Statistiques (INE). Les donnees permettent de distinguer entre les activites de R D internes et externes des filiales. Les resultats d’un modele biprobit montrent que pour les filiales etrangeres en Espagne, la distance a un impact negatif sur la proba-bilite de recourir à la R D externe. Toutefois, la distance n’a pas d’effet statis-tiquement significatif sur la probabilite de faire de la R D pour les filiales des firmes etrangeres. Par ailleurs, les resultats montrent que plus la distance entre les entreprises-meres et les filiales situees en Espagne est grande, moins celles-ci sont susceptibles d’acquerir la technologie de source locale.

Suggested Citation

  • Nadia AYARI, 2010. "Geographic Distance And R D Activities Of Subsidiaries Located In Spain," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 32, pages 203-224.
    • Handle: RePEc:tou:journl:v:32:y:2010:p:203-224
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    References listed on IDEAS

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    More about this item

    Keywords

    GEOGRAPHIC DISTANCE; EXTERNAL R D; INTERNAL R D; MULTINATIONAL ENTERPRISES;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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