Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75035
Authors: 
De Beule, Filip
Van Beveren, Ilke
Year of Publication: 
2009
Series/Report no.: 
LICOS Discussion Paper 242
Abstract: 
This paper analyzes the drivers of multinational affiliates' R&D intensity, using a unique dataset based on the fourth Community Innovation Survey for Belgium. Specifically, we investigate the role of foreign affiliates' local (host country) embeddedness and of host country spillovers on foreign affiliates' research efforts. Our findings show that foreign affiliates who are able to tap into local knowledge sources demonstrate a higher research intensity, compared to firms lacking such access. Links to clients and public research institutions, in particular, have a powerful impetus on the research effort by foreign subsidiaries. Our findings suggest a complementary relationship between foreign firms' R&D intensity and the internal research efforts of their competitors as a result of demonstration effects, while the use of external R&D by competitors has a negative impact on the research effort of foreign affiliates as a result of technological spillovers. Our findings have important policy implications, especially in tfirms of the high dependency of the Belgian economy on foreign R&D. One way to attain the R&D intensity put forward by the Lisbon agenda would be to increase public expenditure on research and development, which would also indirectly increase the research intensity of (foreign) firms.
Subjects: 
R&D intensity
multinational ownership
knowledge sources
spillovers
JEL: 
F23
L23
O31
O33
Document Type: 
Working Paper

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