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Multinational Production and the Scope of Innovation

Author

Listed:
  • Sasan Bakhtiari

    (Australian National University)

  • Antonio Minniti

    () (University of Bologna)

  • Alireza Naghavi

    () (University of Bologna and Centro Studi Luca d'Agliano)

Abstract

This research sheds light on the role of multinational production on the type of innovation per-formed by firms. We construct matched firm-patent data to measure the scope of innovation, that is the extent to which the output of R&D can be spread across different product lines. We focus on two features of multinational production: (i)core knowledge is geographically more difficult to transfer abroad to foreign production sites, (ii) learning spillovers can occur from international op-erations. The results reveal that the second effect is more likely to dominate when a firm is active in more product lines. We argue that a more diversified portfolio of products increases a firm’s span of learning from international operations, thereby enhancing its ability to engage in more fundamental research. In contrast, firms with fewer product lines that geographically separate production from innovation focus on more specialized types of R&D.

Suggested Citation

  • Sasan Bakhtiari & Antonio Minniti & Alireza Naghavi, "undated". "Multinational Production and the Scope of Innovation," Development Working Papers 378, Centro Studi Luca d'Agliano, University of Milano.
  • Handle: RePEc:csl:devewp:378
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    References listed on IDEAS

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    More about this item

    Keywords

    Multinational production; Fundamental innovation; Multiproduct firms; Knowledge spillovers;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • 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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