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Title: Strategic R&D location by multinational firms: Spillovers, technology sourcing, and competition
Authors: Belderbos, Rene
Lykoianni, E
Veugelers, Reinhilde
Issue Date: 2005
Publisher: K.U.Leuven - Departement toegepaste economische wetenschappenD
Series Title: DTEW Research Report 0533 pages:1-38
Abstract: We analyze strategic interaction in R&D internationalization decisions by two multinational firms competing both abroad and in their home markets and examine different incentives for foreign R&D faced by technology leaders and technology laggards. The model takes into account the impact of local inter-firm R&D spillovers, (non-costless) international intra-firm transfer of knowledge, and the notion that internal R&D increases the effectiveness of incoming spillovers. Greater efficiency of intra-firm transfers and greater spillovers increases the attractiveness of home R&D to the technology leader. The lagging firm in contrast increases the share of foreign R&D as overseas technology sourcing becomes more effective. Greater product market competition encourages the leading firm to engage in foreign R&D to capture a larger share of profits on the foreign market, while laggards concentrate more R&D at home to defend their home market position. The country with a stricter intellectual property rights regime attracts a larger shares of R&D by both leader and laggard.
Publication status: published
KU Leuven publication type: IR
Appears in Collections:Department of Managerial Economics, Strategy and Innovation (MSI), Leuven

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