How Do Different Motives for R&D Investment in Foreign Locations Affect Domestic Firm Performance? An Analysis Based on Swiss Panel Micro Data
KOF Swiss Economic Institute Working Paper No. 258
41 Pages Posted: 14 Jun 2010
Date Written: May 1, 2010
Abstract
The aim of this article is to investigate the differences between specific motives of R&D investment in foreign locations with respect to the factors influencing the likelihood of foreign R&D and to the impact of foreign presence on the parent firms’ innovativeness and productivity. An econometric analysis of Swiss firm panel data shows, firstly, that factors related to firm-specific knowledge-oriented advantages are more important for explaining the likelihood of foreign R&D activities than factors reflecting disadvantages related to home location. Secondly, knowledge-oriented motives of foreign R&D are positively correlated to innovation performance of domestic firms, whereas market-oriented and resource-oriented strategies correlate positively with productivity.
Keywords: Research And Development (R&D), Foreign R&D, Motives Of Foreign R&D, Home Effects Of Foreign R&D, Firm Performance
JEL Classification: O31, F23
Suggested Citation: Suggested Citation
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