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Research and Development Operations and Foreign Expansion of Multinational Companies: Evidence from Forest Industry Microdata

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Abstract:

This article examines the impacts of research and development on the mode of multinational expansion (exports versus foreign sales) by forest products companies, and the effects of firms' international strategy on the level of research and development investments. A theoretical model of imperfect competition between international companies is derived and company-level data representing Finnish forest industries are used. The results indicate that the firms' own research and development investments helped, at least during the 1980s, their foreign expansion by favoring the firms' exports rather than foreign sales. External research and development investments by other companies were substitutes for a firm's own investment on research and development in the 1980s, but this effect seems to have disappeared toward the 1990s. There have not appeared to be any significant spillover effects from the research and development activities across the firms.

Keywords: Exports; foreign sales; multinational companies; research and development spillovers

Document Type: Research Article

Publication date: 2006-10-01

More about this publication?
  • Forest Science is a peer-reviewed journal publishing fundamental and applied research that explores all aspects of natural and social sciences as they apply to the function and management of the forested ecosystems of the world. Topics include silviculture, forest management, biometrics, economics, entomology & pathology, fire & fuels management, forest ecology, genetics & tree improvement, geospatial technologies, harvesting & utilization, landscape ecology, operations research, forest policy, physiology, recreation, social sciences, soils & hydrology, and wildlife management.
    Forest Science is published bimonthly in February, April, June, August, October, and December.

    2015 Impact Factor: 1.702
    Ranking: 16 of 66 in forestry

    Also published by SAF:
    Journal of Forestry
    Other SAF Publications
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