The Maturation of Global Corporate R&D: Evidence from the Activity of U.S. Foreign Subsidiaries

43 Pages Posted: 12 Apr 2011 Last revised: 4 Jul 2013

See all articles by Deepak Hegde

Deepak Hegde

New York University (NYU) - Leonard N. Stern School of Business

Diana Hicks

Georgia Institute of Technology

Date Written: August 9, 2007

Abstract

This study empirically investigates the impact of foreign country factors like market size, technological strength of industries, and science and engineering (S&E) capability on the conduct of U.S. overseas R&D during the 1991-2002 period. We find that overseas markets primarily predict the entry of U.S. R&D, while the S&E capability of nations is strongly correlated with the post-entry intensity of U.S. foreign subsidiaries’ innovative activity. We also find important inter-industry differences: U.S. electrical, electronics, computer, and telecommunication industries are strongly drawn towards overseas S&E capacity; industries including Machinery, Automobiles, and Transport equipment are primarily attracted by the technological strength of foreign industry; U.S. R&D in Chemicals mostly follows overseas markets. We discuss the implications of our results to the global organization of innovative activity and innovation policy.

Suggested Citation

Hegde, Deepak and Hicks, Diana, The Maturation of Global Corporate R&D: Evidence from the Activity of U.S. Foreign Subsidiaries (August 9, 2007). Research Policy, Vol. 37, No. 3, 2008, Available at SSRN: https://ssrn.com/abstract=1807079

Deepak Hegde (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Diana Hicks

Georgia Institute of Technology ( email )

Atlanta, GA 30332
United States

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