The Internationalisation of R&D and the Knowledge Production Function

43 Pages Posted: 5 Mar 2012

See all articles by Maria Garcia-Vega

Maria Garcia-Vega

University of Nottingham - School of Economics

Patricia Hofmann

affiliation not provided to SSRN

Richard Kneller

University of Nottingham

Multiple version iconThere are 2 versions of this paper

Date Written: February 29, 2012

Abstract

This paper considers the effect of acquisition FDI on the knowledge production function. We distinguish between acquisitions by MNEs from technologically leading countries and those behind the technological frontier. We show that both acquire similarly R&D intensive domestic firms, but there are important differences post-acquisition. Acquisitions from technologically intensive countries reduce domestic R&D effort, in favor of an increase in foreign technology transfers, which suggests complementarities in the knowledge assets of the MNE and the target firm as a reason for FDI. In contrast, consistent with technology sourcing FDI, acquisitions from non-leading countries increase internal R&D efforts.

Keywords: MNE, knowledge production function, acquisition FDI, knowledge complementarities, technology sourcing

JEL Classification: F230, O330, D220, L200

Suggested Citation

Garcia-Vega, Maria and Hofmann, Patricia and Kneller, Richard, The Internationalisation of R&D and the Knowledge Production Function (February 29, 2012). CESifo Working Paper Series No. 3751. Available at SSRN: https://ssrn.com/abstract=2016028

Maria Garcia-Vega (Contact Author)

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Patricia Hofmann

affiliation not provided to SSRN ( email )

Richard Kneller

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

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