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Unbundling R&D and Manufacturing: Postindustrial Myth or Economic Reality?

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  • Mikko Ketokivi
  • Jyrki Ali‐Yrkkö

Abstract

Understanding determinants of business location decisions is important from the point of view of economic policy. While the determinants of manufacturing and R&D location have been extensively covered in the literature, in this article we examine a largely neglected question: Under what conditions do manufacturing and R&D have to be physically colocated, that is, when is unbundling the two impossible? In a sample of 241 Finnish industrial firms, we find that unbundling R&D and manufacturing is possible for some companies but indeed a postindustrial myth of sorts for many others. The need for colocation correlates with knowledge intensity of activities: product complexity, process complexity, and industry rate of change, but interestingly enough, not with the size of the firm's R&D budget.

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  • Mikko Ketokivi & Jyrki Ali‐Yrkkö, 2009. "Unbundling R&D and Manufacturing: Postindustrial Myth or Economic Reality?," Review of Policy Research, Policy Studies Organization, vol. 26(1‐2), pages 35-54, January.
    • Handle: RePEc:bla:revpol:v:26:y:2009:i:1-2:p:35-54
    DOI: 10.1111/j.1541-1338.2008.00368.x
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