Foreign Subsidiaries and Technology Sourcing in Spain

Abstract

Abstract. Firms acquire external technological knowledge via different channels. In this paper we compare the technology sourcing via R&D outsourcing, R&D outsource offshoring, domestic cooperation for innovation and international cooperation for innovation of foreign subsidiaries and domestic firms. Because the different technology sourcing choices are potentially correlated we apply a multivariate probit specification which allows for systematic correlations among the different choices. The results show that the different technology sourcing choices are indeed interdependent and that foreign subsidiaries show a different pattern of external technology sourcing. Compared to affiliated domestic companies, foreign subsidiaries show a smaller propensity for external technology sourcing via R&D outsourcing from independent firms in the host country, for R&D outsource offshoring, and for international cooperation for innovation. In contrast, foreign subsidiaries show a greater propensity for domestic cooperation for innovation.

Determinants of internal and external R&D offshoring: evidence from Spanish firms

“…In addition, we could expect that, by selling to a larger market, exporters decrease their financial constraints, making international outsourcing relatively less costly for them (García-Vega and Huergo, 2011). The studies by Zuniga (2009, 2016), Huergo (2011), andHoll andRama (2014) gather clear evidence of the positive relation between the exporting character of firms and international R&D outsourcing.…”

“…In this line, in their analysis for French manufacturing firms, Jabbour and Zuniga (2009) show that, within the sample of domestic companies, individual firms appear to be more active in international R&D outsourcing than firms that belong to business groups. Using a similar methodology, Holl and Rama (2014) compare the technology sourcing via domestic R&D outsourcing, international R&D outsourcing, domestic cooperation for innovation and international cooperation for innovation of foreign subsidiaries and domestic firms. Their results for a sample of Spanish firms suggest not only that these choices are interdependent, but also that the behavior of foreign subsidiaries is different.…”

“…Recent papers suggest a different sourcing behavior of foreign subsidiaries as compared to that of domestic affiliates (Holl and Rama, 2014;García-Sánchez et al, 2015). Foreign subsid-iaries may have easier access to available international technology through the use of their group's network of establishments worldwide (Veugelers and Casssiman, 2004).…”

Collaboration in Innovation Between Foreign Subsidiaries and Local Universities: Evidence from Spain

“…In order to isolate properly the effect of foreign ownership, rather than comparing foreign subsidiaries with all other local firms, we distinguished between local firms that belong to a group and those that are not affiliated to a group, in line with recent empirical studies dealing with similar comparisons (Dachs and Peters 2014;Holl and Rama 2014). Foreign subsidiaries are defined as those belonging to a group headquartered in a different country.…”

“…Although we focus on collaboration agreements, it is important to stress that there are other modes of technology sourcing such as subcontracting or informal networking, which are closely interdependent (Holl and Rama 2014;Perkmann and Walsh 2007). A foreign subsidiary may establish simultaneously different types of linkages with one or several universities and these relationships evolve over time (Broströ m, McKelvey, and Sandströ m 2009).…”