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Determinants of Internationalisation of Corporate Technology


  • John Cantwell
  • Elena Kosmopoulou


Based on empirical data at an aggregate level it has been argued that the propensity to internationalise corporate technological activity is higher among firms originating from smaller countries and in less research-intensive industries. However, more disaggregated evidence on the patenting of the world’s largest firms suggests a more complex picture. First, the share of foreign-located activity (through outward investment) depends positively upon the technological strength of each national group of firms in an industry, while the share of foreign-owned activity (through inward investment in a host country) may be deterred by the technological competitiveness of indigenous firms. The degree of internationalisation of technological development depends inversely as well on the extent of localised user-producer interaction in innovation in an industry or in the relevant national innovation system. Second, the largest firms increasingly use international research networks as a means of corporate technological diversification. Thus, when technologically leading groups invest in innovation abroad they tend to switch towards the foreign development of complementary and supporting technologies outside the primary field of their own industry, which tends to remain relatively more concentrated at home. Likewise, while foreign-owned firms in the same industry may be deterred by the intensity of competition in the home centre of a leading national group, strong foreign-owned firms in other industries may pursue their diversification strategies by developing locally the primary technology of that centre (which is not primary for their own industry).

Suggested Citation

  • John Cantwell & Elena Kosmopoulou, 2001. "Determinants of Internationalisation of Corporate Technology," DRUID Working Papers 01-08, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  • Handle: RePEc:aal:abbswp:01-08

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    References listed on IDEAS

    1. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 287-343 National Bureau of Economic Research, Inc.
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    3. Kuemmerle, Walter, 1999. "Foreign direct investment in industrial research in the pharmaceutical and electronics industries--results from a survey of multinational firms," Research Policy, Elsevier, vol. 28(2-3), pages 179-193, March.
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    5. Edwin Mansfield, 1986. "Patents and Innovation: An Empirical Study," Management Science, INFORMS, vol. 32(2), pages 173-181, February.
    6. Cantwell, John, 1995. "The Globalisation of Technology: What Remains of the Product Cycle Model?," Cambridge Journal of Economics, Oxford University Press, vol. 19(1), pages 155-174, February.
    7. John Cantwell & Grazia D. Santangelo, 2000. "Capitalism, profits and innovation in the new techno-economic paradigm," Journal of Evolutionary Economics, Springer, vol. 10(1), pages 131-157.
    8. John Cantwell, 1987. "The Reorganization of European Industries After Integration: Selected Evidence on the Role of Multinational Enterprise Activities," Journal of Common Market Studies, Wiley Blackwell, vol. 26(2), pages 127-151, December.
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    10. Cantwell, John, 2000. "Technological lock-in of large firms since the interwar period," European Review of Economic History, Cambridge University Press, vol. 4(02), pages 147-174, August.
    11. Cantwell, John & Santangelo, Grazia D., 1999. "The frontier of international technology networks: sourcing abroad the most highly tacit capabilities," Information Economics and Policy, Elsevier, vol. 11(1), pages 101-123, March.
    12. repec:fth:harver:1473 is not listed on IDEAS
    13. Patel, Pari & Vega, Modesto, 1999. "Patterns of internationalisation of corporate technology: location vs. home country advantages1," Research Policy, Elsevier, vol. 28(2-3), pages 145-155, March.
    14. Cantwell, John & Piscitello, Lucia, 2000. "Accumulating Technological Competence: Its Changing Impact on Corporate Diversification and Internationalization," Industrial and Corporate Change, Oxford University Press, vol. 9(1), pages 21-51, March.
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    Cited by:

    1. Filippaios, Fragkiskos & Papanastassiou, Marina & Pearce, Robert & Rama, Ruth, 2009. "New forms of organisation and R&D internationalisation among the world's 100 largest food and beverages multinationals," Research Policy, Elsevier, vol. 38(6), pages 1032-1043, July.
    2. Michel, Julie, 2007. "The effects of FDI in R&D on home countries, the case of Switzerland," MPRA Paper 6400, University Library of Munich, Germany.
    3. Rajneesh Narula & Grazia D. Santangelo, 2007. "Location and R&D Alliances in the European ICT Industry," DRUID Working Papers 07-05, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    4. Achcaoucaou, Fariza & Miravitlles, Paloma & León-Darder, Fidel, 2014. "Knowledge sharing and subsidiary R&D mandate development: A matter of dual embeddedness," International Business Review, Elsevier, vol. 23(1), pages 76-90.
    5. Bergek, Anna & Bruzelius, Maria, 2010. "Are patents with multiple inventors from different countries a good indicator of international R&D collaboration? The case of ABB," Research Policy, Elsevier, vol. 39(10), pages 1321-1334, December.
    6. Ruth Rama, 2008. "Foreign investment innovation: a review of selected policies," The Journal of Technology Transfer, Springer, vol. 33(4), pages 353-363, August.

    More about this item


    Internationalisation; technological development;

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production


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