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Firm Location, Corporate Structure, R&D Investment, Innovation and Productivity

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  • Johansson, Börje

    () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Lööf, Hans

    () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Rader Olsson, Amy

    () (CEFIN)

Abstract

This study elucidates how firm location and corporate structure influence R&D-intensity, external collaboration on innovation, return on R&D and economic performance. The study, based on 1,907 firm level observations, essentially compare a functional region with four other regional areas in Sweden. In this context, the Stockholm region is assumed as an integrated functional urban region with innovation-proximity characteristics. The paper examines systematically the influence of location versus various firm characteristics. The econometric results suggest the following: First, a typical Stockholm firm has a significantly larger likelihood than other firms of being engaged in innovation activities. Second, among innovative firms, the R&D intensity and global collaboration on innovation is primarily determined by its corporate structure, not geographic location. Third, the embeddedness in regional and national scientific and vertical innovation systems is relatively more intense outside Stockholm. Finally, the advantage of being located within Sweden’s most strongest concentration of R&D spending, universities, human capital and multinational enterprises with their global networks is reflected by a superior return on R&D investments and higher productivity, when controlling for firm size, human capital, physical capital, R&D-intensity, market orientation and sector classification.

Suggested Citation

  • Johansson, Börje & Lööf, Hans & Rader Olsson, Amy, 2005. "Firm Location, Corporate Structure, R&D Investment, Innovation and Productivity," Working Paper Series in Economics and Institutions of Innovation 31, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0031
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    1. Karlsson, Charlie & Johansson, Börje, 2006. "Regional Development and Knowledge," Working Paper Series in Economics and Institutions of Innovation 76, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    2. Börje Johansson & Hans Lööf, 2011. "FDI Inflows to Sweden: Consequences for Innovation and Renewal," Chapters, in: Sameeksha Desai & Peter Nijkamp & Roger R. Stough (ed.),New Directions in Regional Economic Development, chapter 14, Edward Elgar Publishing.

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    More about this item

    Keywords

    Regional economy; multinational companies; R&D; innovation; innovation system;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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