Robert Owen () (University of Nantes) Bernard Franck () (Université de Caen, Department of Economics)
Abstract
A conceptual framework is proposed for analyzing how differences in national R&D stocks can impact on a firm's decision to internationalize its R&D activities. A central finding is that the integration of product markets can generate an added incentive to undertake R&D abroad. A three-stage analysis of a non-cooperative game is proposed, which entails cost-reducing process innovation in an international model of duopoly. Each firm's technological efficiency depends not only on its investment in applied R&D, but also on its absorption of domestic and foreign fundamental R&D, as well as the extent to which the latter are substitutes or complements. In a first stage, a firm's absorption of foreign fundamental R&D can be impacted by a decision to localize R&D activities abroad. The interrelation between this decision and initial production costs is also explored.
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Find related papers by JEL classification: F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business O3 - Economic Development, Technological Change, and Growth - - Technological Change F15 - International Economics - - Trade - - - Economic Integration
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