Global technology development by colocating R&amp;D and manufacturing: the case of Swedish manufacturing MNEs

Ivarsson, Inge; Alvstam, Claes G.; Vahlne, Jan‐Erik

doi:10.1093/icc/dtw018

Cited by 31 publications

(28 citation statements)

References 78 publications

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“…The need for inter-functional proximity may vary across industries, because the interdependence between production and R&D could be stronger in some industries than in others. Geographical proximity is more important in industries like engineering where the product properties are closely related to the production activities (Ivarsson et al 2016), when the development of new technologies depends on familiarity with the product process and the innovation follows the manufacturing (Pisano and Shih 2009) and the production is an important source of ideas. A survey conducted by Florida (1997) shows that around of 5% of US biotechnological firms consider manufacturing plants as a significant source of innovation, 17% in case of chemicals/materials and around 37% in automotive industries.…”

Section: Location Of International Randdmentioning

confidence: 99%

“…A survey conducted by Florida (1997) shows that around of 5% of US biotechnological firms consider manufacturing plants as a significant source of innovation, 17% in case of chemicals/materials and around 37% in automotive industries. The result of an empirical analysis conducted on 146 R&D units of 17 largest manufacturing Swedish MNEs reveals that, in engineeringintensive industries, firms are more likely co-locate their R&D and production units in order to develop new technologies and products for the global and regional market, not to locally adapt existing products and processes (Ivarsson et al 2016).…”

Section: Location Of International Randdmentioning

confidence: 99%

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Location of R&D Abroad—An Analysis on Global Cities

Castellani

Lavoratori

2018

Relocation of Economic Activity

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This paper investigates the determinants of the location of MNEs' overseas R&D activities, by focusing on two major drivers. On the one hand, external location factors lead the firm to separate its activities along the value chain and geographically disperse these activities in different locations. On the other hand, the R&D location choice may be driven by the existence of internal (within-firm) linkages that motivate firms to locate their value chain activities in the same location (co-location within-firm). Using data from the fDi Markets database, the study examines 2,580 location decisions of new R&D greenfield investments made by MNEs in 110 global cities worldwide, over the period 2003-2014. Results from Conditional and Mixed Logit econometric models reveal that both external and internal factors matter. Findings confirm the strong role of external agglomeration economies, but also suggest that previous R&D and production activities of the same MNE increase the probability to locate R&D in a given global city.Keywords location of international R&D, empirical methodology JEL Classifications F23, O30, R30 Contacts

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Section: Location Of International Randdmentioning

confidence: 99%

Section: Location Of International Randdmentioning

confidence: 99%

Location of R&D Abroad—An Analysis on Global Cities

Castellani

Lavoratori

2018

Relocation of Economic Activity

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“…Next, we assessed potential endogeneity of foreign knowledge using another instrument from the 2006 survey asking whether the firm performed any R&D activity outside Thailand to support internal R&D. Previous research shows that firms with FDIs could use overseas R&D to support and assist internal R&D efforts (Ivarsson et al., ). Overseas R&D is likely to influence firm innovation outcomes through a firm's ability to access foreign knowledge.…”

Section: Resultsmentioning

confidence: 99%

“…These are people who are born in countries other than Thailand but are working in the firm. Previous studies found that foreign researchers can act as integrators to access foreign knowledge to support local firms’ R&D efforts (Ivarsson et al., ). The variable was also positively and significantly correlated with the current measure of foreign knowledge ( r = .41, p < .001).…”

Section: Resultsmentioning

confidence: 99%

“…As foreign technologies tend to be more developed and deployable (Eden, ; Fu et al., ), a local firm working jointly with its foreign counterpart can build on refining and exploiting existing knowledge competencies from its foreign partner. For instance, foreign multinationals can collocate their R&D personnel inside their local partner firms, offering rich “tribal” knowledge on innovation and accelerating their internal development processes (Ivarsson, Alvstam, & Vahlne, ).…”

Section: Theory and Hypothesesmentioning

confidence: 99%

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The Role of Domestic and Foreign Knowledge Inflows on the Relationship between R&D Portfolio Mix and Innovation Outcomes: An Empirical Study of Manufacturing Firms in an Emerging Economy*

2019

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Manufacturing firms in emerging economies face research and development (R&D) challenges that are quite different from firms in developed economies. Firms in emerging economies complement their internal R&D capabilities by accessing two forms of external knowledge: domestic knowledge from local partners and foreign knowledge from multinationals. Accessing these knowledge sources requires distinct organizational capabilities, and they may differently moderate the relationship between internal R&D investments on exploration and exploitation and innovation outcomes. Exploitation R&D investments refer to investments made on refining products and processes, while exploration R&D investments refer to investments made on designing new products and processes. We examine this issue by combining two waves of surveys from 155 manufacturing firms in Thailand. Results show that relative exploration (i.e., the ratio of R&D investments made toward exploration over sum of exploration and exploitation) exhibits an inverted U-shaped relationship with the number of process and product innovations developed by the firm. This optimal mix, corresponding to the tipping point of an inverted U-shaped curve, shifts toward a higher level of relative 349 350 An Empirical Study of Manufacturing Firms in an Emerging Economy exploration (i.e., higher exploration and lower exploitation) when manufacturers have more access to domestic knowledge, and shifts toward a lower level of relative exploration (i.e., lower exploration and higher exploitation) when manufacturers have more access to foreign knowledge. Our findings are robust with similar effects on a firm's revenue generated from innovations. Taken together, these results demonstrate how external knowledge flows can moderate, in contrasting ways, the relationship between R&D portfolio mix and innovation outcomes. These findings also imply that inappropriately prioritizing R&D mix can lead to suboptimal innovation outcomes, offering further insights to both practicing managers and academics interested in emerging economy contexts.

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