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Does Excellence in Academic Research Attract Foreign R&D?

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  • Rene Belderbos
  • Bart Leten
  • Shinya Suzuki

Abstract

We examine the role of host countries' academic research strengths in global R&D location decisions by multinational firms. While we expect that a firm's propensity to perform R&D in a host country increases with the strength of local academic research, firms are expected to be heterogeneously positioned to benefit from academic research strengths due to differences in the capacity to absorb and utilize scientific knowledge. We find support for these conjectures in an analysis of foreign R&D activities in 40 host countries and 30 technology fields by 176 leading European, US and Japanese firms during the periods 1995-1998 and 1999-2002. Controlling for a wide range of host country factors, the number of relevant ISI publications by scientists based in the host country has a substantial positive impact on the propensity to conduct foreign R&D. The effect of academic research is significantly larger for firms with a stronger science orientation in R&D - as indicated by citations to scientific literature in prior patents. For host countries with a strong relevant science base, this greater responsiveness of science oriented firms more than offsets a generally greater inclination to concentrate R&D at home. The findings appear robust across a variety of specifications.

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  • Rene Belderbos & Bart Leten & Shinya Suzuki, 2009. "Does Excellence in Academic Research Attract Foreign R&D?," Global COE Hi-Stat Discussion Paper Series gd09-079, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hst:ghsdps:gd09-079
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    Cited by:

    1. Kampik, Franziska & Dachs, Bernhard, 2010. "The innovative performance of German multinationals abroad," MPRA Paper 28102, University Library of Munich, Germany.
    2. Berliant, Marcus & Fujita, Masahisa, 2012. "Culture and diversity in knowledge creation," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 648-662.
    3. Sandra Leitner & Bernhard Dachs & Robert Stehrer, 2012. "Determinants of R&D activities of multinational firms abroad," ERSA conference papers ersa12p196, European Regional Science Association.
    4. Bernhard Dachs, 2014. "R&D Internationalisation and the Global Financial Crisis," Chapters, in: Bernhard Dachs & Robert Stehrer & Georg Zahradnik (ed.), The Internationalisation of Business R&D, chapter 13, pages 1-3, Edward Elgar Publishing.
    5. Andrea Szalavetz, 2010. "The Hungarian automotive sector – a comparative CEE perspective with special emphasis on structural change," EIIW Discussion paper disbei182, Universitätsbibliothek Wuppertal, University Library.
    6. Grigori Feiguine & Julia Solovjova, 2014. "ICT Modernization and Globalization: Russian Perspectives," EIIW Discussion paper disbei199, Universitätsbibliothek Wuppertal, University Library.
    7. Martin Falk, 2016. "Austria 2025 – Corporate Investment in Austria. Stylised Facts, Impacts, Determinants and Investment Policies," WIFO Studies, WIFO, number 59183, February.
    8. Bart Leten & Paolo Landoni & Bart Van Looy, 2011. "Developing Technology in the Vicinity of Science: Do Firms Benefit? An Overview and Empirical Assessment on the Level of Italian Provinces," Chapters, in: Massimo G. Colombo & Luca Grilli & Lucia Piscitello & Cristina Rossi-Lamastra (ed.), Science and Innovation Policy for the New Knowledge Economy, chapter 5, Edward Elgar Publishing.
    9. Jürgen Janger, 2015. "Business Science Links For a New Growth Path. WWWforEurope Working Paper No. 107," WIFO Studies, WIFO, number 58413, December.

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    Keywords

    R&D internationalization; Knowledge sourcing; Absorptive capacity; Industry-science links;
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    JEL classification:

    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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