This paper looks at the perception of obstacles to innovation of both foreign multinational enterprises (MNEs) and domestic firms located in Italy. Drawing on firm-level data from the Italian third Community Innovation Survey (CIS3), we show that important differences in firms’ perception of obstacles to innovation occur both across macro-regions and types of firms (i.e. foreign multinationals versus domestic firms belonging to a group and single domestic firms). The results offer support to the typical North-South divide that exists in the Italian innovation system. In addition, firms belonging to a group (especially foreign MNEs) appear to be less sensitive to their socio-economic and institutional context than single domestic firms.

This paper provides a theoretical model of the trade-offs that an MNE faces when organising its R&D as decentralised or centralised. R&D decentralisation avoids having to adapt centrally developed innovations to local markets, being able to use the specific know-how of the subsidiary. In addition R&D subsidiaries can be used to source locally available external know-how. At the same time, however, R&D internationalisation intensifies the spillover of valuable know-how to competitors located in the foreign markets. The analysis demonstrates the importance of the intensity of competition in the local market in determining the size of both the benefits and costs of R&D decentralisation. It shows that when R&D is undertaken abroad in association with production, the local knowledge base is not unequivocally a pulling factor attracting R&D investments by foreign MNEs, depending on the level of local competition. The paper also shows that efficiency in reverse intra-company technology transfers is a critical factor in benefiting from technology sourcing. The results thus illustrate the complementarity of efficient internal and external knowledge management systems. In addition the model suggests that, with a fall in the cost of intra-company technology transfers, relative market size loses importance as a locational factor for R&D decentralisation. Journal of International Business Studies (2007) 38, 47–63. doi:10.1057/palgrave.jibs.8400249

No abstract

A major concern regarding innovation in clean technologies in the EU is that the fragmentation of its innovation system may hinder knowledge flows and, consequently, spillovers across member countries. A low intensity of knowledge flows across EU states can negatively impact their technological base, suppressing opportunities for further innovations and hindering the movement towards the technological frontier. This paper evaluates the fragmentation of the EU innovation system in the field of renewable energy sources (RES) by examining the intensity and direction of knowledge spillovers over the years 1985-2010. We modify the original double exponential knowledge diffusion model to provide information on the degree of integration of EU countries' innovation efforts and to assess how citation patterns changed over time. We show that EU RES inventors have increasingly built "on the shoulders of the other EU giants", intensifying their citations to other member countries and decreasing those to domestic inventors. Furthermore, the EU strengthened its position as source of RES knowledge for the US. Finally, we show that this pattern is peculiar to RES, with other traditional (i.e. fossilbased) energy technologies behaving in a completely different way.

SummaryThis paper analyses the impact of unilateral climate policy on firms' international location strategies in emission-intensive sectors, when countries differ in terms of market size. The cases of partial and total relocation via foreign direct investment are separately considered. A simple international duopoly model highlights the differences between short-term and long-term effects. In the short-term no change in location is a likely outcome in very capitalintensive sectors, and when there is a strategy shift this takes the form of partial instead of total relocation. In the long-run total relocation becomes a feasible outcome. However we found that, when tighter mitigation measures are introduced by the larger country and unit transport cost is high, with a pronounced market asymmetry the probability of firms not relocating abroad is high even in the long-term. The welfare implications of unilateral environmental measures are assessed considering global industrial pollution and accounting for shifts in location strategy. This paper analyses the impact of unilateral climate policy on firms' international location strategies in emission-intensive sectors, when countries differ in terms of market size. The cases of partial and total relocation via foreign direct investment are separately considered. A simple international duopoly model highlights the differences between short-term and long-term effects. In the short-term no change in location is a likely outcome in very capital-intensive sectors, and when there is a strategy shift this takes the form of partial instead of total relocation. In the long-run total relocation becomes a feasible outcome. However we found that, when tighter mitigation measures are introduced by the larger country and unit transport cost is high, with a pronounced market asymmetry the probability of firms not relocating abroad is high even in the long-term. The welfare implications of unilateral environmental measures are assessed considering global industrial pollution and accounting for shifts in location strategy. KeywordsJEL classifications: F12, F23, Q58