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Choice of foreign R&D entry mode and its relation to firm performance: A firm-level analysis for Switzerland and Austria

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  • Hollenstein, Heinz
  • Berger, Martin

Abstract

The objective of this study is to identify the determinants of a firm's foreign entry mode choice and the relationship between mode selection and firm performance for the specific case of R&D-a topic not yet investigated in entry mode research. Separate estimates of a Heckman selection model for Austria and Switzerland based on comparable firm-level data and variable specification show for both countries that the OLI model is well-suited to explain not only the propensity to invest in R&D abroad but also the related choice between an equity-based and a non-equity governance mode. Moreover, the research reveals that foreign R&D activity is positively related to firm performance and that this relationship is stronger in the case of an equity-based mode of governance, however only in the Swiss case. The differences between the two countries primarily reflect the much higher degree of internationalisation of the Swiss economy.

Suggested Citation

  • 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.
  • Handle: RePEc:zbw:ifweej:201534
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    File URL: http://dx.doi.org/10.5018/economics-ejournal.ja.2015-34
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    File URL: https://www.econstor.eu/bitstream/10419/121930/1/838425674.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Internationalisation of R&D; Foreign R&D entry mode choice; International R&D co-operation; Foreign R&D governance and firm performance;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • 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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