Foreign-owned subsidiaries: a neglected nexus between foreign direct investment, industrial and innovation policies

Costa, Ionara; Filippov, Sergey

doi:10.3152/030234208x339409

Cited by 23 publications

(13 citation statements)

References 42 publications

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“…The relation of foreign innovation activities and host country productivity growth has also been shown by several scholars (Keller and Yeaple, 2003;Coe and Helpman, 1995). R&D of foreign-owned firms does also stimulate the R&D expenditures in many host countries (Lonmo and Andersen, 2003;Costa and Filippov, 2008;UNCTAD, 2005). Following this perspective, foreign-owned firms can benefit from technological developments that are initiated by international spillovers.…”

Section: International Randd Spilloversmentioning

confidence: 75%

Intellectual Property Infringements Due to R&D Abroad? A Comparative Analysis Between Firms with International and Domestic R&D Activities

Schmiele

2010

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp10099.pdf Non-technical SummaryBy internationalising R&D activities, firms can improve their chances to respond to local demands and benefit from local knowledge globally. However, differences in culture and the legal system can challenge firms and lead to higher costs. Furthermore R&D activities abroad are often considered to cause IPR infringements, especially in the case of weak intellectual property protection systems. This paper aims at analysing whether firms with international R&D activities are confronted with a higher risk of intellectual property infringements (IPR) than firms with domestic innovation processes only. The paper differentiates between specific types of infringements: the usage of firms' technical inventions, product piracy and copying of corporate names and designs. The analysis is based both on a qualitative explorative study which consists of six interviews, involving five German companies active in China and aGerman legal advisor for intellectual property protection as well as on an empirical study. The empirical study is based on the data of the Mannheimer Innovation Panel (MIP).The explorative study showed that the involved firms disbelieve that R&D activities in China increase the risk of IP infringements, that they all entered the Chinese market with well prepared IP protection and despite the fact that they were all facing IP infringements, these cases turned out to be manageable. The results of the empirical analysis indicate that international innovation activities lead to a higher risk of infringements of technological knowledge. However, firms whose R&D activities are only based in their home countries face an increased risk of product piracy. By differentiating between host countries with weak and strong intellectual property rights, it has been found the effects from both kinds of countries do not vary from each other. A larger scope of innovation processes abroad also causes a higher likelihood of infringements from countries in which the firms innovate abroad.Infringements from countries where the firms do not operate R&D activities are driven by the export intensity of the firm. Das Wichtigste in Kürze AbstractThis paper aims at analysing the risk of intellectual property (IP) infringements by competitors from abroad and in particular whether this risk is higher for international innovating firms. We distinguish three different type...

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Section: International Randd Spilloversmentioning

confidence: 75%

Intellectual Property Infringements Due to R&D Abroad? A Comparative Analysis Between Firms with International and Domestic R&D Activities

Schmiele

2010

SSRN Journal

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“…Gertler (2001) questions the convergence of practices of FDI and national institutions, in essence, arguing that geography still matters. As regards national innovation polices, Costa and Filippov (2008) highlight the fact that foreign-owned subsidiaries have been for the most part overlooked. This may be partly explained by the tensions that can often exist between the differing interests of host countries, which are primarily interested in promoting sustainable development, and those of foreign companies, whose goals are more associated with market and profit issues (Dunning 1998).…”

Section: Decentralising Multinational Randdmentioning

confidence: 98%

“…Despite being part of a host country's innovation system, innovation policy tends to ignore the particular characteristics of foreign-owned subsidiaries. Subsidiaries that succeed in becoming better positioned within their corporate network can have greater potential for adding higher value added activities to the host economy and also become more embedded within the innovation system of that economy (Costa and Filippov 2008). In addition to the potential for making such a contribution to the innovation system of host countries, the primary role of foreign-owned subsidiaries is within the corporate network of their parent company.…”

Section: Decentralising Multinational Randdmentioning

confidence: 99%

The contribution of the overseas ICT sector to expanding R&D investment in Ireland

Grimes

Collins

2009

Irish Geography

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This paper traces the evolution of R&D investment by overseas companies in the Information and Communication Technology (ICT) sector in Ireland in recent years. This investment is seen as a further stage in the evolution of ICT subsidiaries from an earlier focus on manufacturing to an increasing involvement in higher value-added activities such as internationally traded services. The recent targeting of R&D foreign direct investment coincides with a major increase of investment by the state in research and innovation, primarily through Science Foundation Ireland and the creation of research links between third level institutes. In addition to tracing Ireland's aggregate R&D trends, the paper examines some case studies of R&D investments by foreign-owned ICT companies, and suggests some policy implications. IntroductionThe disproportionate amount of inward investment that Ireland has attracted out of the total for Europe is regarded by many as the cornerstone of the country's recent economic success (Barry 2004). The two most important sectors for this investment have been Information and Communication Technology (ICT) and Pharmaceuticals/ Health Care. This paper focuses on research and development (R&D) investment by overseas-owned subsidiaries in ICT-related activities. Initially, Ireland's foreign direct investment (FDI) development model was primarily focused on attracting technology manufacturing, but with major changes in international competitiveness and the rise of newly emerging regions particularly in Asia, the focus of overseas subsidiaries in Ireland has evolved towards a greater involvement in internationally traded services (Grimes 2006). While this evolution in subsidiary activity has reflected a shift towards higher value activities in a wide range of areas associated with business and supply chain management for the European and wider regions, recent policy changes have been introduced to ensure a greater level of R&D activity by foreignowned technology subsidiaries. This paper will trace the nature and extent of R&D activity of overseas ICT companies in Ireland and seek to relate this activity to growing claims of Ireland's increasing involvement in knowledge-based activities.The paper will initially explore the literature on the recent trends towards the decentralisation of R&D activity by high technology multinational companies, as they seek to tap into the knowledge resources of more diverse regions. We will also

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“…Such competitive creative environment would make domestic firms stronger, attract newcomers and will stimulate evolution of subsidiaries. In fact, FDI policy should extend from initial attraction of FDI to supporting the already existing subsidiaries to evolve towards a broader scope of activities and develop R&D capacities (Costa and Filippov, 2007). CzechInvest is set to provide "after-care" support to foreign investors.…”

Section: Conclusion and Policy Implicationsmentioning

confidence: 99%

New Europe's Promise for Life Sciences

Filippov¹,

Kalotay

2008

SSRN Journal

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The life sciences sector (and biotechnology in particular) has emerged as a prospective area, and attracted a lot of attention recently. Multinational companies in the life sciences seek to explore new markets, and, on the other side, governments strive to develop the life sciences sector perceiving it as a basis for long-term development. Whilst the R&D activities of global multinationals in life sciences still remain concentrated in the Triadic economies, these companies increasingly seek for new location to tap the knowledge. New EU member states emerge as such prospective locations. Notwithstanding the interest towards this sector, the body of literature on the development of life sciences in new EU member states, and particularly, the role of multinational companies, remains scant. In this explorative study we attempt to fill this gap and focus on the role of multinational companies in the Czech life sciences sector. JEL codes: F21 F23 L65 O32

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Foreign-owned subsidiaries: a neglected nexus between foreign direct investment, industrial and innovation policies

Cited by 23 publications

References 42 publications

Intellectual Property Infringements Due to R&D Abroad? A Comparative Analysis Between Firms with International and Domestic R&D Activities

Intellectual Property Infringements Due to R&D Abroad? A Comparative Analysis Between Firms with International and Domestic R&D Activities

The contribution of the overseas ICT sector to expanding R&D investment in Ireland

New Europe's Promise for Life Sciences

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