Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/50898 
Year of Publication: 
2006
Series/Report no.: 
KOF Working Papers No. 154
Publisher: 
ETH Zurich, KOF Swiss Economic Institute, Zurich
Abstract: 
The aim of this paper is twofold: Firstly, we try to identify and characterise different types of strategies firms pursue in performing foreign R&D. Secondly, it is analysed whether the types of R&D strategies we identified in the first part differ in terms of their impact on firm productivity. In order to identify foreign R&D strategies we perform, in a first step, a non-hierarchical cluster analysis of data on the firms' motives for investing abroad in R&D. In a second step, we characterise these clusters by use of a large number of variables that, according to the well-known OLI paradigm, determine a firm's FDI in distribution, manufacturing and R&D. In this way, we can check whether the clusters identified by applying a (purely) statistical classification procedure effectively may be interpreted as types of foreign R&D strategies. We end up with four types of strategies, which significantly differ in terms of characteristics that are important according to the OLI approach. In the second part we estimate a production function where the standard factor inputs are complemented by domestic R&D and strategy-specific foreign R&D. It turns out that only one of the four strategies exerts a positive influence on firm productivity. However, it cannot be excluded that some of the other strategies have, in the longer run, a positive productivity effect as well. The paper also finds that foreign and domestic R&D, on balance, are complements.
Subjects: 
Internationalisation of R&D
outward FDI in R&D
motives for foreign R&D
types of foreign R&D strategies
foreign R&D and productivity
substitution vs. complementarity of foreign and domestic R&D
JEL: 
F21
F23
O3
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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