The Internationalization of Corporate R&D

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THE INTERNATIONALIZATION OF CORPORATE R&DIn parallel with increasing offshore R&D-investments by the home-based multinationalcompanies, the presence of R&D-intense foreign multinational companies in the homecountry increases rapidly, mainly through mergers and acquisitions.From a policy perspective it is important to increase the understanding of how thisongoing globalization affects national innovation systems. An effect on the innovationsystem is positive if it improves conditions for industrial renewal, creates new areas ofspecialization or contributes to a country’s economic growth. An effect is consideredharmful if it renders the national innovation system less effective in stimulating renewaland growth.Strategic R&D is a basic component of a company’s long-term development. When thestrategic parts of innovation activities remain in the home country, orchestration of thecompany’s future and its assets remains there as well. If activities tend to drift abroad, alikely outcome is that the company as such gradually leaves its initial country of residence.In contrast, R&D spending abroad that aims at adjusting products and servicesto match customer demands and preferences in a foreign market does not imply that thecontrol of knowledge assets are moving away from the home region of the company.It is also necessary to identify and investigate those factors that have a strong influenceon how “national” multinational companies allocate their R&D investments betweenthe home county and abroad. Which are the factors that influence foreign multinationalcompanies to locate their R&D activities to establishments in their home country?In a similar way as for “national” multinational companies locating R&D abroad, weneed to identify factors that are important for foreign multinational companies to engagein R&D in the host country. In this context it is important to understand whichtypes of innovation activities that foreign multinational companies carry out inside intheir home country instead of abroad.Another important issue to investigate further is the effects of R&D globalization andthe frequency of spin-offs from nationally-controlled and foreign-controlled multinationalcompanies.100
THE INTERNATIONALIZATION OF CORPORATE R&DReferencesArchibugi, D. & J. Michie (1995) “The Globalisation of Technology: A New Taxonomy,”Cambridge Journal of Economics, Vol. 19, pp. 121–40.Audretsch, D. B. & M. P. Feldman (1996) “R&D Spillovers and the Geography ofInnovation and Production,” The American Economic Review, Vol. 86, No. 3,pp. 630–640.Cantwell J. & O. Janne (1999) “Technological Globalisation and Innovative Centres:the Role of Corporate Technological Leadership and Location Hierarchy,” ResearchPolicy, Vol. 28, pp. 119–144.Coe, D. T. & E. Helpman (1995) “International R&D Spillovers,” European EconomicReview, Vol. 39, pp. 859–87.Criscuolo, P., R. Narula & B. Verspagen (2005) “Role of Home and Host CountryInnovation Systems in R&D Internationalisation: a Patent Citation Analysis,”Economics of Innovation and New Technology, Vol. 14, pp. 417–433.Dunning, H. H. & R. Narula (1995) “The R&D Activities of Foreign Firms in theUnited States,” International Studies of Management & Organization, Vol. 25,No. 1–2, pp. 39–73.Ehrnberg, E. & S. Jacobsson (1997) “Technological Discontinuities and Incumbents’Performance: an Analytical Framework,” In: Edquist, C. (Ed.), Systems of InnovationTechnologies, Institutions and Organisations. Pinter Publishers, London, Washington.Freeman, C. (1992) “Formal Scientific and Technical Institutions in the National System ofInnovation,” in B. Lundvall (Ed.) National Systems of Innovation. Towards a Theoryof Innovation and Interactive Learning, Pinter Publishers, London.Grandstrand, O. (1998) “Towards a Theory of the Technology Based Firm,” ResearchPolicy, Vol. 27, pp. 465–89.Hagedoorn, J. (1993) “Understanding the Rationale of Strategic Technology Partnering:Inter-organizational Modes of Cooperation and Sectoral Differences,”Strategic Management Journal, Vol. 14, pp. 371–385.Hagedoorn, J. (2002) “Intern-Firm R&D Partnerships: An Overview of Patterns andTrends since 1960,” Research Policy, Vol. 31, pp. 477–92.Hedlund, G. (1986) “The Hypermodern MNC-a Heterarchy,” Human Resource Management,Vol. 25, pp. 9–35.ITPS (2005a) Research and Development at International Enterprises 2003, ReportS2005:005, Swedish Institute for Growth Policy Studies.101
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