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Fundamental R&D Spillovers and the Internationalization of a Firm's Research Activities

Author

Listed:
  • Robert Owen

    (University of Nantes)

  • Bernard Franck

    (Université de Caen, Department of Economics)

Abstract

A conceptual framework is proposed for analyzing how differences in national R&D stocks can impact on a firm's 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 firm's 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 firm's 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

  • Robert Owen & Bernard Franck, 2004. "Fundamental R&D Spillovers and the Internationalization of a Firm's Research Activities," Yale School of Management Working Papers ysm389, Yale School of Management.
    • Handle: RePEc:ysm:somwrk:ysm389
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    File URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=415503
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    Cited by:

    1. 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.
    2. 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.
    3. 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.
    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. 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.
    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:

    • 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
    • F15 - International Economics - - Trade - - - Economic Integration

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