Strategic R&D location by multinational firms : spillovers, technology sourcing, and competition

R.A. Belderbos, E. Lykogianni, R. Veugelers

Research output: Book/ReportReportAcademic


We analyse strategic interaction in R&D internationalization decisions by two multinational firms competing both abroad and in their home markets and examine different incentives for foreign R&D faced by technology leaders and technology laggards. The model takes into account the impact of local inter-firm R&D spillovers, (non-costless) international intra-firm transfer of knowledge, and the notion that internal R&D increases the effectiveness of incoming spillovers. Greater efficiency of intra-firm transfers and greater spillovers increases the attractiveness of home R&D to the technology leader. The lagging firm in contrast increases the share of foreign R&D as overseas technology sourcing becomes more effective. Greater product market competition encourages the leading firm to engage in foreign R&D to capture a larger share of profits on the foreign market, while laggards concentrate more R&D at home to defend their home market position. The country with a stricter intellectual property rights regime attracts a larger share of R&D by both leader and laggard.
Original languageEnglish
Place of PublicationLondon
PublisherCentre for Economic Policy Research
Commissioning bodyCentre for Economic Policy Research
Number of pages38
Publication statusPublished - 2005

Publication series

NameCEPR Discussion Paper


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