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Multinationals and the globalization of R&D

García-Vega, María; Hofmann, Patricia; Kneller, Richard


Patricia Hofmann


In this paper we consider how the location, organization and output of knowledge production evolve within domestic firms following acquisition-FDI in order to understand the aggregate effect on an index of domestically produced innovations. We find strong differences according to how close the acquiring MNE is to the technologically frontier. Frontier MNEs are more likely to close R&D activities in acquired affiliates, but when they are retained they expand employment of high-skilled R&D workers and transfer R&D knowledge. Non-frontier MNEs make fewer changes to R&D. Overall the effect of acquisition-FDI on the domestic innovation index is positive.

Journal Article Type Article
Publication Date Mar 31, 2019
Journal International Journal of Industrial Organization
Print ISSN 0167-7187
Electronic ISSN 1873-7986
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 63
Pages 583-614
APA6 Citation García-Vega, M., Hofmann, P., & Kneller, R. (2019). Multinationals and the globalization of R&D. International Journal of Industrial Organization, 63, 583-614.
Keywords MNE; Knowledge Production Function; Acquisition FDI; Knowledge Complementarities; R&D: innovation, Technology Transfers
Publisher URL
Additional Information This article is maintained by: Elsevier; Article Title: Multinationals and the globalization of R&D; Journal Title: International Journal of Industrial Organization; CrossRef DOI link to publisher maintained version:; Content Type: article; Copyright: © 2019 Elsevier B.V. All rights reserved.