Title: On the R&D giants' shoulders. Do FDI help to stand on them?
Citation: Economia e Politica Industriale – Journal of Industrial and Business Economics vol. 42 no. 1 p. 33-60
Publisher: Springer
Publication Year: 2015
JRC N°: JRC92221
ISSN: 0391-2078
URI: http://link.springer.com/article/10.1007%2Fs40812-014-0002-1
DOI: 10.1007/s40812-014-0002-1
Type: Articles in periodicals and books
Abstract: We investigate the impact of outward FDI on the MNCs' technological leadership, meant as the capacity of entering and remaining among the top R&D world investors. The research hypotheses are formulated by distinguishing FDI in R&D from FDI in other economic activities. The findings support our hypotheses with respect to the top R&D circles of the European Industrial Research and Innovation Scoreboard. Increasing the number of FDI projects in R&D makes the entrance in these circles more probable. The same holds true for non-R&D FDI, but with a lower impact. The number of R&D{FDI also reduces the probability of exiting from the circles, while that of non-R&D ones does not. These results are robust when the value of FDI projects in R&D is considered, apart from their impact on the exit from the circles, which appears to vanish. Although with caveats, the policy support to R&D internationalization provides companies with a sustainable competitive advantage in the race for the most substantial R&D investments and for the entailed economic and financial benefits.
JRC Directorate:Growth and Innovation

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