The returns to foreign R&D

R.A. Belderbos, B. Lokshin, B.M. Sadowski

Research output: Contribution to journalArticleAcademicpeer-review

21 Citations (Scopus)

Abstract

Extant research on research and development (R&D) internationalization has not examined how effective foreign R&D investments are in generating positive returns for the investing firms, in particular in comparison and conjunction with the effects of domestic R&D investments. We examine the effectiveness of international knowledge sourcing through foreign R&D in an empirical analysis of the productivity effects of foreign and domestic R&D investments in a large panel of firms based in the Netherlands. We argue that foreign and domestic R&D will exhibit complementarity in their effects on productivity, but that the roles of domestic and foreign R&D depend on the relative position of the home country with respect to the global technology frontier and the related relative opportunities for knowledge sourcing abroad. We estimate a dynamic panel data model derived from a knowledge stock augmented production function framework allowing for productivity convergence and declining returns to R&D. We confirm that for firms active in industries in which the home country is behind the global technology frontier, foreign R&D provides positive returns and has a complementary relationship with domestic R&D. For industries at the global technology frontier, in contrast, domestic R&D is the primary source of productivity growth.
LanguageEnglish
Pages491-504
JournalJournal of International Business Studies
Volume46
Issue number4
DOIs
StatePublished - 2015

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Productivity
Data structures
Industry
Home country
Knowledge sourcing

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Belderbos, R.A. ; Lokshin, B. ; Sadowski, B.M./ The returns to foreign R&D. In: Journal of International Business Studies. 2015 ; Vol. 46, No. 4. pp. 491-504
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Belderbos, RA, Lokshin, B & Sadowski, BM 2015, 'The returns to foreign R&D' Journal of International Business Studies, vol. 46, no. 4, pp. 491-504. DOI: 10.1057/jibs.2014.63

The returns to foreign R&D. / Belderbos, R.A.; Lokshin, B.; Sadowski, B.M.

In: Journal of International Business Studies, Vol. 46, No. 4, 2015, p. 491-504.

Research output: Contribution to journalArticleAcademicpeer-review

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Belderbos RA, Lokshin B, Sadowski BM. The returns to foreign R&D. Journal of International Business Studies. 2015;46(4):491-504. Available from, DOI: 10.1057/jibs.2014.63