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R&D internationalization and firm productivity. Does the host country matter?

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  • Jaana Rahko

Abstract

The prior literature has established that the internationalization of corporate R&D is motivated by access to new markets and technological knowledge. However, the empirical literature has overlooked whether the market and technological characteristics of R&D host countries influence the firm-level productivity gains from international R&D. This study empirically examines whether international R&D activities affect the productivity of European multinational firms. Estimating an R&D augmented production function shows that the output elasticity of R&D depends positively on the share of international R&D activities. The analysis further shows that the improvements are associated only with offshore R&D in host countries that have experienced fast economic growth or that are technologically stronger than firms’ home country.

Suggested Citation

  • Jaana Rahko, 2021. "R&D internationalization and firm productivity. Does the host country matter?," Applied Economics, Taylor & Francis Journals, vol. 53(16), pages 1807-1825, April.
    • Handle: RePEc:taf:applec:v:53:y:2021:i:16:p:1807-1825
    DOI: 10.1080/00036846.2020.1853668
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    Cited by:

    1. Zhou, Chao, 2022. "Global diversification, host-country environments, and corporate philanthropic giving: Evidence from Chinese multinational corporations," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    2. Huaxin Wang-Lu & Octasiano Miguel Valerio Mendoza, 2022. "Job Prospects and Labour Mobility in China," Papers 2207.08282, arXiv.org, revised Sep 2022.
    3. Boutheina Abassi & Moez El Elj, 2022. "R&D internationalisation and sector productivity: a host country perspective," SN Business & Economics, Springer, vol. 2(11), pages 1-18, November.

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