The gravity of cross-border R&D expenditure

Konferenzbeitrag

In recent years, firms have considerably decentralized their research and development (R&D) activities. Subsidiaries of foreign multinational enterprises (MNEs) are now among the top performers of R&D in many EU and non-EU countries. Specifically, MNE affiliates account for around 20% of total business R&D in France, Germany and Italy; between 30% and 50% in Canada, Portugal, the Slovak Republic, Sweden and the United Kingdom; and more than 50% in Austria, Belgium, the Czech Republic, Hungary and Ireland. Against that backdrop, the paper uses a novel and unique data base on R&D expenditure of foreign-owned firms for a set of OECD countries and identifies and analyzes factors that drive the scale of R&D expenditure across countries and sectors. The empirical analysis employs a gravity approach which demonstrates that geography plays a pivotal role as distance between host and home country of a foreign-owned firm, a common language spoken in both home and host countries, or common borders are key drivers of cross-border R&D investments. Moreover, results reveal that additional determinants such as larger host and home country markets or superior host country human capital bases are conducive to R&D expenditure of foreign-owned firms while stronger human capital bases in home countries deter R&D efforts of foreign-owned firms abroad.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: 52nd Congress of the European Regional Science Association: "Regions in Motion - Breaking the Path", 21-25 August 2012, Bratislava, Slovakia

Classification and Topics

• Classification: Wirtschaft ; Multinational Firms; International Business ; Management of Technological Innovation and R&D ; Technological Change: Choices and Consequences; Diffusion Processes
• Subject: internationalisation of research and development ; multinational firms ; gravity model

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Leitner, Sandra ; Dachs, Bernhard ; Stehrer, Robert
• Event: Veröffentlichung
• (who): European Regional Science Association (ERSA)
• (where): Louvain-la-Neuve
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/120480
• Last update: 10.03.2025, 11:43 AM CET