The innovative performance of German multinationals abroad

Kampik, Franziska and Dachs, Bernhard (2010): The innovative performance of German multinationals abroad. Forthcoming in: Industrial and Corporate Change

Abstract

This paper analyzes cross-country differences in innovation behavior of subsidiaries of German multinational enterprises. The analysis is based on data from Community Innovation Survey (CIS4) and covers 16 European countries. We find considerable differences in innovation input intensity and innovation output intensity between German subsidiaries located in different European countries. Multivariate analysis reveals that these differences are largely related to firm characteristics. A significant relationship between firm-level innovation and host country characteristics can only be found for innovation output.

• Item Type: MPRA Paper
• Language: English
• Keywords: Internationalization of innovation, German multinational firms, innovation performance, Community Innovation Survey
• Subjects: F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O32 - Management of Technological Innovation and R&D; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives

References

Ambos, B. (2005), 'Foreign direct investment in industrial research and development: A study of German MNCs,' Research Policy, 34(4), 395–410.

Belderbos, R. (2001), 'Overseas Innovations by Japanese Firms: An Analysis of Patent and Subsidiary Data,' Research Policy, 30(2), 313-332.

Belderbos, R. et al. (2009), Does Excellence in Scientific Research attract foreign R&D? UNU-Merit Working Paper. Maastricht: UNU-MERIT.

Blundell, R., and M. Costa Dias (2000), 'Evaluation Methods for Non-Experimental Data,' Fiscal Studies, 21(4), 427-468.

Breen R. (2003), ‘Regression models: censored, sample-selected or truncated data,’ 4th Edition. Sage University Paper Series on Quantitative applications in the social sciences 07-111, Thousand Oaks.

Cantner, U., and A. Pyka (1998), 'Absorbing Technological Spillovers: Simulations in an Evolutionary Framework,' Industrial and Corporate Change, 7(2), 369-397.

Cantwell, J., and R. Mudambi (2005), 'MNE competence-creating subsidiary mandates,' Strategic Management Journal, 26(12), 1109-1128.

Cantwell, J., and L. Piscitello (2002), 'The location of technological activities of MNCs in European regions: The role of spillovers and local competencies,' Journal of International Management, 8, 69–96.

Cantwell, J., and L. Piscitello (2005), 'Recent Location of Foreign-owned Research and Development Activities by Large Multinational Corporations in the European Regions: The Role of Spillovers and Externalities,' Regional Studies, 39(1), 1-16.

Cohen, W.M. (1995), 'Empirical Studies of Innovative Activity,' in P. Stoneman (ed.),Handbook of Innovation and Technological Change. Blackwell: Oxford.

Cohen, W.M. (2010), 'Fifty Years of Empirical Studies of Innovative Activity and Performance,' in B.A. Hall and N. Rosenberg (ed.),Handbook of Economics of Innovation. Elsevier: Amsterdam.

Cohen, W.M., and D. Levinthal (1989), 'Innovation and Learning: the Two Faces of R&D,' Economic Journal, 99(September), 569-596.

Cohen, W.M., and D. Levinthal (1990), 'Absorptive Capacity: A New Perspective on Learning and Innovation,' Administrative Science Quarterly, 35, 128-152.

Dunning, J., and R. Narula (1995), 'The R&D activities of foreign firms in the United States,' International Studies of Management & Organization, 25(1-2), 39-72.

Ebersberger, B., and H. Lööf (2005), Corporate Innovation Activities, Does Ownership Matter? Oslo: STEP.

Edler, J. (2004), 'International Research Strategies of Multinational Enterprises: A German Perspective,' Technological Forecasting and Social Change, 71, 599-621.

Fischer, M.M. (2001), ‘Innovation, knowledge creation and systems of innovation,’ The Annals of Regional Science, 35(2), 199-216.

Frenz, M., and G. Ietto-Gillies (2007), 'Does Multinationality Affect the Propensity to Innovate? An Analysis of the Third UK Community Innovation Survey,' International Review of Applied Economics, 21(1), 99-117.

Fu V.K., C. Winship, and R.D. Mare (2009), ‘Sample Selection Bias Models.’ In Hardy M. and A. Bryman (eds.) The Handbok of Data Analysis, 409-430. Sage Publications, London, Thousand Oaks, New Delhi and Singapore.

Greene, W.H. (2002), Econometric Analysis (4th edition ed.). Prentice-Hall: Upper Saddle River.

Harris, R., and Q.C. Li (2009), 'Exporting, R&D, and absorptive capacity in UK establishments,' Oxford Economic Papers, 61(1), 74-103.

Heckman, J.J. (1976), 'The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models,' Annals of Economic and Social Measurement, 5(4), 475-492.

Heckman, J.J. (1979), 'Sample Selection Bias as a Specification Error ' Econometrica, 47(1), 153-161.

Ito, B., and R. Wakasugi (2007), 'What factors determine the mode of overseas R&D by multinationals? Empirical evidence,' Research Policy, 36(8), 1275-1287.

Kennedy, P. (2003), A Guide to Econometrics (5th ed.). MIT Press, Cambridge [Mass.].

Kleinknecht, A., and P. Mohnen (eds., 2002). Innovation and Firm Performance. Basingstoke and New York: Palgrave.

Kuemmerle, W. (1999), 'Foreign Direct Investment in Industrial Research in the Pharmaceutical and Electronics Industries - Results from a Survey of Multinational Firms,' Research Policy, 28(2-3), 179-193.

Lachenmaier, S., and L. Wößmann (2006), 'Does innovation cause exports? Evidence from exogenous innovation impulses and obstacles using German micro data,' Oxford Economic Papers, 58(2), 317-350.

le Bas, C., and C. Sierra (2002), ''Location versus Home Country Advantages' in R&D Activities: Some Further Results on Multinationals' Locational Strategies,' Research Policy, 31(4), 589-609.

Narula, R., and A. Zanfei (2005), 'Globalisation of Innovation: The Role of Multinational Enterprises,' in J. Fagerberg et al. (ed.),The Oxford Handbook of Innovation. Oxford University Press: Oxford.

OECD (2005), Oslo Manual. Guidelines for Collecting and Interpreting Innovation Data (Third Edition ed.). Organisation for Economic Co-operation and Development: Paris.

OECD (2008), The Internationalisation of Business R&D: Evidence, Impacts and Implications. Organisation for Economic Co-operation and Development: Paris.

OECD (2009), Innovation in Firms. A Microeconomic Perspective. Organisation for Economic Co-operation and Development: Paris.

OECD (2010), Main Science and Technology Indicators 1/2010. Organisation for Economic Co-operation and Development: Paris.

Patel, P., and K. Pavitt (1999), 'Global Corporations and National Systems of Innovation: Who Dominates Whom?,' in D. Archibugi et al. (ed.),Innovation Policy in a Global Economy. Cambridge University Press: Cambridge.

Patel, P., and M. Vega (1999), 'Patterns of Internationalisation of Corporate Technology: Location vs. Home Country Advantages,' Research Policy, 28(2-3), 145-155.

Peneder, M. (2010), 'Technological regimes and the variety of innovation behaviour: Creating integrated taxonomies of firms and sectors,' Research Policy, 39(3), 323-334.

Phene, A., and P. Almeida (2008), 'Innovation in multinational subsidiaries: The role of knowledge assimilation and subsidiary capabilities ' Journal of International Business Studies, 39(5), 901-919.

Rosenberg, N. (1990), 'Why Do Firms Do Basic Research (With Their Own Money)?,' Research Policy, 9(2), 165-174.

Sadowski, B.M., and G. Sadowski-Rasters (2006), 'On the innovativeness of foreign affiliates: Evidence from companies in The Netherlands,' Research Policy, 35(3), 447-462.

Schmiele, A. (2009), Drivers for International Innovation Activities in Developed and Emerging Countries. Mannheim: ZEW Discussion Paper No. 09-064.

UNCTAD (2005), World Investment Report 2005: Transnational Corporations and the Internationalization of R&D. New York and Geneva: United Nations.

von Zedtwitz, M., and O. Gassmann (2002), 'Market versus Technology Drive in R&D Internationalization: Four different Patterns of Managing Research and Development,' Research Policy, 31(4), 569-558.

Wooldridge, J.M. (2002), Introductory Econometrics: A Modern Approach. 2nd Edition. South-Western College Publishers: Mason.