AIB 2012 Conference Proceedings - Academy of International ...

TUESDAY
What Matters More - Experience or Competitive Imitation A Longitudinal Study of R&D Location Decisions
Pallavi Shukla, Rutgers University
Drawing on the internationalization process model and the knowledge-based theory of the firm, I develop a
theoretical framework to examine the effect of (skilled) immigrant concentration on the research and
development (R&D) location decisions of multinational firms. I argue that firms are increasingly relying on its
skilled immigrant workers for enriching their social knowledge and that this knowledge in conjunction with prior
experience is used by firms in making decisions to site R&D activities in international locations. However, the
recent phenomenon of dramatic growth in the number of R&D centers in developing countries can also be seen
as a mimetic behavior of firms and can be explained by the neoinstitutional theory. The purpose of this paper is
to develop theoretical propositions that seek to examine the time-varying effects of experience, immigrant
concentration and competitive imitation on the decision to locate R&D activities in an international location. (For
more information, please contact: Pallavi Shukla, Rutgers University, USA: p.shukla.awasthi@gmail.com)
Do Firm Specific Intangible Assets Compensate Weak Legal Institutions Empirical Evidence on the
Relationship between Multinationality and Value from European Firms
Stefan Eckert, International Graduate School Zittau
Marcus Dittfeld, IHI-Zittau
Florian Meinfelder, University of Bamberg
We analyze the relationship between multinationality and firm value for a sample encompassing 42,866 firmyear-observations
from different EU-countries for the period from 1990 to 2006. To obtain a deeper insight into
the relationship we split our sample in four subgroups depending on the legal traditions mentioned in La Porta
et al. (1998). Our findings document that corporate multinationality independent of other prerequisites only
leads to value enhancement in the case of firms from countries belonging to the common law tradition, i.e.
countries with a high degree of investor protection. On the other hand we find that, firms from countries
belonging to the civil low tradition have to be in charge of certain firm-specific intangible assets if
multinationality should have a positive impact on firm value. In this sense, firm-specific intangible assets seem
to work as a kind of surrogate mechanism for legal institutions concerning investor protection. We further find
that the lower the degree of investor protection, the higher the requirements concerning the nature of
intangible assets as a prerequisite for investors' preparedness to pay a premium on firm value for corporate
multinationality. (For more information, please contact: Marcus Dittfeld, IHI-Zittau, Germany: dittfeld@ihizittau.de)
AIB 2012 Conference Proceedings
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