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Global technology development by colocating R&D and manufacturing: the case of Swedish manufacturing MNEs

Author

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  • Inge Ivarsson
  • Claes Alvstam
  • Jan-Erik Vahlne

Abstract

In this study we analyze the role of colocation between research and development (R&D) and manufacturing for global technology development by multinational enterprises (MNEs). The extant literature suggests that the main strategic role of colocated R&D units is to locally adapt existing products and processes. However, data from 146 foreign R&D units of Sweden’s 17 largest manufacturing MNEs in 2013 show that they instead mainly develop new technology, not only for the local and regional markets, but to a large extent for the global market. A likely explanation is that colocation positively contributes to joint problem-solving and transfer of tacit knowledge between production and R&D personnel, all of which is necessary in new product development, especially in industries characterized by complex products and systems and rapid technological change. A theoretical implication is that depending on industry characteristics, internal cross-functional linkages between R&D and manufacturing can be more critical than external supply- and demand-side factors when it comes to influence where R&D units are located globally.

Suggested Citation

  • Inge Ivarsson & Claes Alvstam & Jan-Erik Vahlne, 2017. "Global technology development by colocating R&D and manufacturing: the case of Swedish manufacturing MNEs," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 26(1), pages 149-168.
    • Handle: RePEc:oup:indcch:v:26:y:2017:i:1:p:149-168.
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    File URL: http://hdl.handle.net/10.1093/icc/dtw018
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    Citations

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    Cited by:

    1. Lopez-Vega, Henry & Tell, Fredrik, 2021. "Technology strategy and MNE subsidiary upgrading in emerging markets," Technological Forecasting and Social Change, Elsevier, vol. 167(C).
    2. Andrea Coveri & Antonello Zanfei, 2023. "Who wins the race for knowledge-based competitiveness? Comparing European and North American FDI patterns," The Journal of Technology Transfer, Springer, vol. 48(1), pages 292-330, February.
    3. René Belderbos & Davide Castellani & Helen S. Du & Geon Ho Lee, 2024. "Internal versus external agglomeration advantages in investment location choice: The role of global cities’ international connectivity," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 55(6), pages 745-763, August.
    4. René Belderbos & Marcelina Grabowska & Stijn Kelchtermans & Bart Leten & Jojo Jacob & Massimo Riccaboni, 2021. "Whither geographic proximity? Bypassing local R&D units in foreign university collaboration," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(7), pages 1302-1330, September.
    5. Coad, Alex & Vezzani, Antonio, 2019. "Three cheers for industry: Is manufacturing linked to R&D, exports, and productivity growth?," Structural Change and Economic Dynamics, Elsevier, vol. 50(C), pages 14-25.
    6. Annekatrin Niebuhr & Jan Cornelius Peters & Alex Schmidke, 2020. "Spatial sorting of innovative firms and heterogeneous effects of agglomeration on innovation in Germany," The Journal of Technology Transfer, Springer, vol. 45(5), pages 1343-1375, October.
    7. Szalavetz, Andrea, 2019. "Industry 4.0 and capability development in manufacturing subsidiaries," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 384-395.
    8. Eliasson, Kent & Hansson, Pär & Lindvert, Markus, 2024. "Regional location of business sector research and development," Working Papers 2024:4, Örebro University, School of Business.
    9. Marina Papanastassiou & Robert Pearce & Antonello Zanfei, 2020. "Changing perspectives on the internationalization of R&D and innovation by multinational enterprises: A review of the literature," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 623-664, June.
    10. Niccolò Pisani & Joan Enric Ricart, 2018. "Offshoring Innovation to Emerging Countries: The Effects of IP Protection and Cultural Differences on Firms’ Decision to Augment Versus Exploit Home-Base-Knowledge," Management International Review, Springer, vol. 58(6), pages 871-909, December.
    11. Belderbos, René & Leten, Bart & Suzuki, Shinya, 2023. "International R&D and MNCs' innovation performance: An integrated approach," Journal of International Management, Elsevier, vol. 29(6).

    More about this item

    Keywords

    O32; O33; R30;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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