Multinationals and the globalization of R&D

Garc�a-Vega, Mar�a; Hofmann, Patricia; Kneller, Richard

Abstract

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.

Citation

García-Vega, M., Hofmann, P., & Kneller, R. (2019). Multinationals and the globalization of R&D. International Journal of Industrial Organization, 63, 583-614. https://doi.org/10.1016/j.ijindorg.2019.01.001

• Journal Article Type: Article
• Acceptance Date: Jan 6, 2019
• Online Publication Date: Jan 12, 2019
• Publication Date: Mar 31, 2019
• Deposit Date: Jan 8, 2019
• Publicly Available Date: Jan 13, 2021
• 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
• DOI: https://doi.org/10.1016/j.ijindorg.2019.01.001
• Keywords: MNE; Knowledge Production Function; Acquisition FDI; Knowledge Complementarities; R&D: innovation, Technology Transfers
• Public URL: https://nottingham-repository.worktribe.com/output/1449833
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S0167718719300049?via%3Dihub
• 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: https://doi.org/10.1016/j.ijindorg.2019.01.001; Content Type: article; Copyright: © 2019 Elsevier B.V. All rights reserved.