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Multinationality, R&D and productivity: Evidence from the top R&D investors worldwide

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  • Davide Castellani

    () (Henley Business School, University of Reading)

  • Sandro Montresor
  • Torben Schubert
  • Antonio Vezzani

Abstract

This paper investigates the effects of multinationality on firm productivity, and contributes to the literature in two respects. First, we argue that multinationality affects productivity both directly and indirectly, through higher incentives to invest in R&D. Second, we maintain that the multinational depth and breadth have different direct effects on productivity and R&D. Using data from the top R&D investors in the world, we propose an econometric model with an R&D and a productivity equation that both depend on multinationality. We find: i) multinational depth has a positive effect on productivity, while the effect of multinational breadth is negative; ii) multinationality (along both dimensions) has a positive effect on R&D intensity, translating into an indirect positive effect on productivity; iii) the positive indirect effect is however not large enough to compensate the negative direct effect of multinational breadth.

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  • Davide Castellani & Sandro Montresor & Torben Schubert & Antonio Vezzani, 2016. "Multinationality, R&D and productivity: Evidence from the top R&D investors worldwide," John H Dunning Centre for International Business Discussion Papers jhd-dp2016-04, Henley Business School, Reading University.
  • Handle: RePEc:rdg:jhdxdp:jhd-dp2016-04
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    1. repec:eee:iburev:v:26:y:2017:i:6:p:1124-1140 is not listed on IDEAS
    2. Schiffbauer, Marc & Siedschlag, Iulia & Ruane, Frances, 2017. "Do foreign mergers and acquisitions boost firm productivity?," International Business Review, Elsevier, vol. 26(6), pages 1124-1140.

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    Keywords

    Multinationality; R&D; productivity;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • 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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