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Choice of foreign R&D entry mode and impact on firm performance: A firm-level analysis for Switzerland and Austria

Author

Listed:
  • Hollenstein, Heinz
  • Berger, Martin

Abstract

The study seeks to identify the determinants of a firm's foreign entry mode choice and the impact of mode selection on firm performance for the specific case of R&D - a topic so far not investigated in entry mode research. Separate estimates of a Heckman selection model for Austria and Switzerland, based on comparable firm-level data and variable specification, show for both countries that the OLI model is well-suited to explain not only the propensity to investing abroad in R&D but also the respective choice between equity-based and non-equity governance modes. Moreover, it turns out, but only for Swiss companies, that foreign R&D raises (domestic) firm performance with a larger impact in case of equity-based governance. The differences between the two countries primarily reflect the much higher degree of R&D internationalisation of Switzerland.

Suggested Citation

  • Hollenstein, Heinz & Berger, Martin, 2015. "Choice of foreign R&D entry mode and impact on firm performance: A firm-level analysis for Switzerland and Austria," Economics Discussion Papers 2015-39, Kiel Institute for the World Economy (IfW Kiel).
  • Handle: RePEc:zbw:ifwedp:201539
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    Citations

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    Cited by:

    1. Martin Falk, 2016. "Austria 2025 – Corporate Investment in Austria. Stylised Facts, Impacts, Determinants and Investment Policies," WIFO Studies, WIFO, number 59183, February.
    2. Haigang Li & Shaofeng Ru & Victor Shi & Peng Zhang & Ganlin Pu, 2021. "The Effect of Government Subsidy Policy for Foreign Capital R&D from the Perspective of Global Supply Chains: An Empirical Analysis with Time Lag and Propensity Score Matching," Sustainability, MDPI, vol. 13(15), pages 1-12, July.
    3. Tang, Ryan W. & Buckley, Peter J., 2020. "Host country risk and foreign ownership strategy: Meta-analysis and theory on the moderating role of home country institutions," International Business Review, Elsevier, vol. 29(4).

    More about this item

    Keywords

    internationalisation of R&D; foreign R&D entry mode choice; international R&D cooperation;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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