Foreign and domestic R&D investment
Abstract:A considerable share of R&D investment is due to multinational firms that simultaneously operate R&D bases at home and abroad. We develop a simple model of foreign and domestic R&D investment and test the model's predictions on a sample of 146 Japanese multinational firms' R&D investments in Japan and the United States in 1996. The empirical results confirm that the foreign to domestic R&D ratio depends on relative technological opportunities and relative demand conditions, with foreign research expenditures responding to technological opportunity and foreign development expenditures responding to demand.
Document Type: Research Article
Affiliations: 1: Department of Managerial Economics, Strategy and Innovation, Katholieke Universiteit Leuven, Leuven, Belgium 2: Institute of Economic Research, Hitotsubashi University 2-1 Naka, Kunitachi City, Tokyo, Japan 3: Yokohama City University, Graduate School of International Management, Yokohama, Japan
Publication date: January 1, 2009