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Fundamental R&D Spillovers and the Internationalization of a FirmÌs Research Activities

Author

Listed:
  • Bernard Franck

    (University of Caen)

  • Robert Owen

    (University of Nantes)

Abstract

A conceptual framework is proposed for analyzing how differences in national R&D stocks can impact on a firmÌs 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 firmÌs 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 firmÌs 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.

Suggested Citation

  • Bernard Franck & Robert Owen, 2003. "Fundamental R&D Spillovers and the Internationalization of a FirmÌs Research Activities," Cowles Foundation Discussion Papers 1425, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:1425
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    File URL: https://cowles.yale.edu/sites/default/files/files/pub/d14/d1425.pdf
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    Citations

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    Cited by:

    1. Bernard Franck & Robert Frank Owen, 2004. "L'internationalisation de la recherche fondamentale d'une firme," Revue d'économie politique, Dalloz, vol. 114(3), pages 353-370.
    2. René Belderbos & Elissavet Lykogianni & Reinhilde Veugelers, 2008. "Strategic R&D Location by Multinational Firms: Spillovers, Technology Sourcing, and Competition," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(3), pages 759-779, September.
    3. René Belderbos & Elissavet Lykogianni & Reinhilde Veugelers, 2008. "Strategic R&D Location in European Manufacturing Industries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(2), pages 183-206, July.
    4. René Belderbos, 2006. "R&D Activities in East Asia by Japanese, European, and US Multinationals," Microeconomics Working Papers 21887, East Asian Bureau of Economic Research.
    5. Long Gen Ying, 2008. "The Shape of Ideas Production Function in Transition and Developing Economies: Evidence from China," International Regional Science Review, , vol. 31(2), pages 185-206, April.
    6. Laurens, Patricia & Le Bas, Christian & Schoen, Antoine & Villard, Lionel & Larédo, Philippe, 2015. "The rate and motives of the internationalisation of large firm R&D (1994–2005): Towards a turning point?," Research Policy, Elsevier, vol. 44(3), pages 765-776.

    More about this item

    Keywords

    Fundamental R&D; spillovers; international location; economic integration;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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