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Multinationals and the Globalization of R&D

Author

Listed:
  • María García-Vega
  • Patricia Hofmann
  • Richard Kneller
Abstract
We consider theoretically and empirically how the location and organization of knowledge production evolve within domestic firms during the period of their acquisition by foreign multinationals. Acquisitions do not increase the risk of closure of the subsidiary’s research labs unless acquired by MNEs at the technological frontier. Conditional on keeping research in the subsidiary, there is a large decrease of innovation expenditures, transfer of knowledge and reorganization towards high-skilled workers. We show that innovations increase, which is a consequence of the complementarity between foreign technology transfers and skilled-workers in the subsidiary.

Suggested Citation

  • María García-Vega & Patricia Hofmann & Richard Kneller, 2015. "Multinationals and the Globalization of R&D," Discussion Papers 2015-18, University of Nottingham, GEP.
    • Handle: RePEc:not:notgep:15/18
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    Cited by:

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    2. Almodóvar, Paloma & Nguyen, Quyen T.K., 2022. "Product innovation of domestic firms versus foreign MNE subsidiaries: The role of external knowledge sources," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    3. Maria Garcia-Vega & Apoorva Gupta & Richard Kneller, 2023. "Is acquisition-FDI during an economic crisis detrimental for domestic innovation?," Discussion Papers 2023-03, University of Nottingham, GEP.

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    More about this item

    Keywords

    MNE; Knowledge Production Function; Acquisition FDI; Knowledge Complementarities; R&D innovation.;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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