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What determines the location choice of R&D activities by multinational firms?

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  • Siedschlag, Iulia
  • Smith, Donal
  • Turcu, Camelia
  • Zhang, Xiaoheng

Abstract

We analyse 446 location decisions of R&D activities by multinational firms incorporated in the European Union over 1999–2006. Our results suggest that on average, the location probability of a representative R&D foreign affiliate increased with agglomeration economies from foreign R&D activities, human capital, proximity to centres of research excellence and the research and innovation capacity of the region. Further, our evidence suggests that in comparison to European multinational firms, the effects of patents intensity and proximity to centres of research excellence were stronger in the case of North American multinational firms. While government R&D expenditure intensity increased the probability of location of R&D activities by European multinational firms in the region, it did not have a significant effect on the probability of location of R&D activities by North American multinational firms.

Suggested Citation

  • Siedschlag, Iulia & Smith, Donal & Turcu, Camelia & Zhang, Xiaoheng, 2013. "What determines the location choice of R&D activities by multinational firms?," Research Policy, Elsevier, vol. 42(8), pages 1420-1430.
    • Handle: RePEc:eee:respol:v:42:y:2013:i:8:p:1420-1430
    DOI: 10.1016/j.respol.2013.06.003
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    More about this item

    Keywords

    Foreign direct investment; Internationalisation of R&D; Location choice; Conditional logit models; Nested logit models; European Union;
    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
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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