Multinational firms, technology and location

Abstract

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Subsidizing Away Exports? A Note on R&D-policy Towards Multinational Firms

“…This is surprising considering the close tie in the literature between firm-specific assets and MNEs, but it confirms earlier findings in Norbäck (2001), where exports were shown to be the preferred choice by R&D-intensive firms.…”

“…I will, however, only report a specification using the contemporaneous R&D intensity RDINT it as an instrument for the four-year lag. As discussed in Norbäck (2001), this prevents a massive loss of observations associated with the eight-year lag, due to a heavily unbalanced firm panel, as many firms disappear when they are acquired or reorganized over time. Note that given that R&D is conducted before sales take place, R&D in time t should also be uncorrelated with the error term in (16).…”

Relocation and investment in R&D by firms

“…Our paper differs from that of Petit and Sanna-Randaccio (2000) and Norbäck (2001) whether R&D encourages relocation by comparing the case in which firms invest in R&D with that in which firms do not do so. Second, their papers focus their analysis on the study of how firms can enter new markets, while we study how firms can be competitive in their home markets.…”

Organization of multinational activities and ownership structure

“…9 Norbäck (2001) considers the decision between exports and FDI assuming costly technology transfers in the case of horizontal investments. While the idea is similar to ours, we deviate in our assumption as transfer costs depend on the ownership structure.…”