Do Technology Leaders Deter Inward R&D Investments? Evidence from Regional R&D Location Decisions in Europe

Abstract

Leading technology intensive firms have incentives to protect knowledge outflows to collocated firms in order to enhance the returns to R&D (Alcácer and Zhao, 2012). In this paper we argue that leading firms' knowledge protection strategies are likely to discourage other firms from setting up new R&D establishments in their vicinity. Knowledge protection is facilitated by an R&D organization emphasizing internal knowledge flows drawing on complementary contributions by dispersed R&D units. We examine whether the presence and R&D organization of local technology leaders discourages inward R&D investments in an analysis of the (NUTS-1) regional location of 196 cross-border R&D investment projects in EU-15 countries during [2003][2004][2005][2006][2007][2008]. While the strength of the local relevant technology clusters attracts inward R&D investments, investors are generally discouraged by the concentration of technology activities due to the presence of regional technology leaders in the industry. This discouraging effect occurs specifically in case the leaders exhibit an internally oriented R&D organization drawing on cross-border intra-firm knowledge flows in their technology development activities. Our study challenges the common notion in the literature on clusters and innovation that agglomeration is generally associated with greater knowledge spillovers.

Risk propensity in the foreign direct investment location decision of emerging multinationals

“…Nevertheless, one restriction of mixed logit model is that it imposes prespecified distribution functions on random coefficients, the most common being normal distribution (Belderbos & Somers, 2015). We have no a priori theoretical reason to adopt a particular function form.…”

Measuring China's patent quality: Development and validation of ISR indices

“…Firms with more self citations are able to appropriate returns from earlier investment in R&D and signal the presence of "cumulative innovations" (Lanjouw and Schankerman 2004). Self citations may also be an indicator of "fencing"which is prevalent when firms build an "IPR wall" around themselves (Belderbos and Somers 2015). Because foreign, domestic, and self citations characterize different origins of follow-up inventions, a more nuanced understanding of patent quality can be achieved by considering information from all three citation types.…”

The Features of Regional Investment Analysis in Relation to the Corporate Sector of Economy in Conditions of Globalization

“…They express the statistic dependence between average annual basic stock investment growth rate and average annual gross regional product growth rate for each group of regions of Russian Federation with various type of urban settlement, demographic and commodity profile. In our research we examined works of foreign and Russian scholars, which deal with the typology of regions, factors of intensive regional investment attractiveness, such as Levin & Xepapadeas (2017), Chala et al (2015), Mascaro et al (2015), Viturka & Paril (2015), Inkelas et al (2015), Remington & Thomas (2015), Iwasaki & Suganuma (2015), , Nurtdinov (2012Nurtdinov ( , 2016, Belderbos & Somers (2015) and others. Corinna (2006) states that the criteria for grouping must be important both from exigency and possibility of investment process with certain degree of intensity point of view, and from direct and indirect influence of the mentioned criteria on developing the characteristics of regional economic dynamics.…”