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Globalization of R&D by U.S-based Multinational Enterprises

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  • Prema-chandra Athukorala
  • Archanun Kohpaiboonb

Abstract

This paper examines patterns and determinants of overseas R&D investment by US-based manufacturing MNEs using a new panel dataset over the period 1990-2004. The analysis reveals that R&D intensity of operation of US MNE affiliates is mainly determined by the domestic market size, overall R&D capability and cost of hiring R&D personnel. There is no evidence to suggest that financial incentives have a significant impact on inter-country differences in R&D intensity when controlled for other relevant variables. Overall, our findings cast doubts on the efficacy of efforts by host country governments entice MNEs affiliates to engage in domestic R&D in a global context where R&D is becoming a truly global activity.

Suggested Citation

  • Prema-chandra Athukorala & Archanun Kohpaiboonb, 2009. "Globalization of R&D by U.S-based Multinational Enterprises," Departmental Working Papers 2009-07, The Australian National University, Arndt-Corden Department of Economics.
  • Handle: RePEc:pas:papers:2009-07
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    Cited by:

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    2. Marina Papanastassiou & Robert Pearce & Antonello Zanfei, 2020. "Changing perspectives on the internationalization of R&D and innovation by multinational enterprises: A review of the literature," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 623-664, June.
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    5. Heike Belitz, 2014. "Motive der Internationalisierung von Forschung und Entwicklung," DIW Roundup: Politik im Fokus 29, DIW Berlin, German Institute for Economic Research.
    6. Barros, Henrique M., 2011. "The Effects of Innovation Partnership, Foreign Ownership and Enhanced Management Practices on the Use of Patents in Brazilian Manufacturing," Insper Working Papers wpe_255, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
    7. Emanuela Todeva & Ruslan Rakhmatullin, 2016. "Industry Global Value Chains, Connectivity and Regional Smart Specialisation in Europe. An Overview of Theoretical Approaches and Mapping Methodologies," JRC Research Reports JRC102801, Joint Research Centre (Seville site).
    8. Jaana Rahko, 2016. "Internationalization of corporate R&D activities and innovation performance," Industrial and Corporate Change, Oxford University Press, vol. 25(6), pages 1019-1038.
    9. Ke Ding & Helian Xu & Rongming Yang, 2021. "Taxation and Enterprise Innovation: Evidence from China’s Value-Added Tax Reform," Sustainability, MDPI, vol. 13(10), pages 1-20, May.
    10. Alvandi , Keyvan & Chaminade , Cristina & Lv, Ping, 2013. "Commonalities and differences between production-related FDI (PFDI) and technology-related FDI (TFDI) in developed and emerging economies," Papers in Innovation Studies 2013/47, Lund University, CIRCLE - Centre for Innovation Research.
    11. Yang, Chih-Hai & Matsuura, Toshiyuki & Ito, Tadashi, 2019. "R&D and patenting activities of foreign firms in China: The case of Japan," Japan and the World Economy, Elsevier, vol. 49(C), pages 151-160.
    12. Daniel Sommer & Bernd Ebersberger, 2021. "International R&D teams: Performance effects and the moderating role of technological competences," Economics Bulletin, AccessEcon, vol. 41(2), pages 387-397.
    13. Lorena D’Agostino, 2015. "The neglected effects of R&D captive offshoring in emerging countries on the creation of knowledge at home," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(1), pages 61-91, March.
    14. Dettmann, Eva & Dominguez Lacasa, Iciar & Günther, Jutta & Jindra, Björn, 2013. "Determinants of Foreign Technological Activity in German Regions – A Count Model Analysis of Transnational Patents (1996-2009)," IWH Discussion Papers 12/2013, Halle Institute for Economic Research (IWH).
    15. Nikolay Anguelov, 2017. "Lowering the Marginal Corporate Tax Rate: Why the Debate?," Economic Affairs, Wiley Blackwell, vol. 37(2), pages 213-228, June.
    16. Patricia Laurens & Pierluigi Toma & Antoine Schoen & Cinzia Daraio & Philippe Larédo, 2022. "How does Internationalisation affect the productivity of R&D activities in large innovative firms? A conditional nonparametric investigation," Post-Print hal-03840316, HAL.
    17. Sommer, Daniel & Bhandari, Krishna Raj, 2022. "Internationalization of R&D and Innovation Performance in the Pharma Industry," Journal of International Management, Elsevier, vol. 28(3).
    18. Fan, Peilei & Urs, Nicolae & Hamlin, Roger E., 2019. "Rising innovative city-regions in a transitional economy: A case study of ICT industry in Cluj-Napoca, Romania," Technology in Society, Elsevier, vol. 58(C).
    19. Liu, Ting & Li, Xizhuo, 2022. "How Do MNCs Conduct Local Technological Innovation in a Host Country? An Examination From Subsidiaries' Perspective," Journal of International Management, Elsevier, vol. 28(3).
    20. Zhang, Shaopeng & Wang, Xiaohong, 2022. "Does innovative city construction improve the industry–university–research knowledge flow in urban China?," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    21. Dachs, Bernhard, 2017. "Internationalisation of R&D: A Review of Drivers, Impacts, and new Lines of Research," MPRA Paper 83367, University Library of Munich, Germany.
    22. Dettmann, Eva & Lacasa, Iciar Dominguez & Guenther, Jutta & Jindra, Bjorn, 2014. "Детерминанты Зарубежной Технологической Активности В Германии - Количественный Анализ Транснациональных Патентов [Determinants of Foreign Technological Activity in German Regions - A Count Model An," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 34-51.
    23. Eva Dettmann & Iciar Dominguez Lacasa & Jutta Guenther & Bjorn Jindra, 2014. "Determinants of Foreign Technological Activity in German Regions - A Count Model Analysis of Transnational Patents," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 8(1), pages 34-51.
    24. Thomson, Russell, 2013. "National scientific capacity and R&D offshoring," Research Policy, Elsevier, vol. 42(2), pages 517-528.
    25. Hurtado-Torres, Nuria E. & Aragón-Correa, J. Alberto & Ortiz-de-Mandojana, Natalia, 2018. "How does R&D internationalization in multinational firms affect their innovative performance? The moderating role of international collaboration in the energy industry," International Business Review, Elsevier, vol. 27(3), pages 514-527.

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    More about this item

    Keywords

    R&D; multinational enterprises; foreign direct investment;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • 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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