International knowledge sourcing: evidence from U.S. firms expanding abroad

Abstract

Recent research demonstrates that firms, motivated by national differences in technical activity, expand abroad to source unique knowledge. Extant research suggests that firms use a knowledge sourcing strategy to 'catch up' with competitors and to obtain 'technical diversity.' We widen the investigation by suggesting that firms also use knowledge sourcing as a springboard to reduce their next generation R&D costs-that firms would seek out similar R&D activity to combine with their own. Using unique data that encompasses the multitude of countries where U.S. firms invest, we test the importance of these explanations. Measuring knowledge via patent stocks, we find that country-industries with larger stocks and greater technical similarity to the United States are more attractive. These findings suggest that an important explanation for firms investing abroad is not catching up or technologically diversifying, but is using similar R&D efforts of others to overcome fixed R&D cost hurdles. 1224W. Chung and S. Yeaple heterogeneity. Further improvements should similarly broaden and deepen our understanding of this strategic behavior.

Made to Fit: How Practices Vary as They Diffuse.

“…For studying technical fit one might create a measure of the similarity of the technological base of the practice and the adopting organization based on, for example, patent stock data (Chung & Yeaple, 2008) or expert assessment of similarity. Furthermore, on the demand side the absorptive capacity of an organization is an established measure (Lane & Lubatkin, 1998).…”

Drivers and impacts in the globalization of corporate R&D: an introduction based on the European experience

“…However, over the last decades, the international reallocation of the value chain has increasingly shifted towards the 'unbundling' of activities previously vertically integrated and locally concentrated (see Hummels et al, 2001;Hanson et al, 2005;Helpman, 2006;Rugman et al, 2010). This unbundling trend has recently affected R&D and innovation which were previously considered 'core activities' to be retained by companies' headquarters (see Grossman and Helpman, 1991;Florida, 1997;Chung and Yeaple, 2008).…”

La genèse d’un centre de R&D à l’international. Le cas de l’industrie automobile

“…Si la notion de firme « transnationale » s'est affirmée comme une nouvelle manière de penser et de gérer la répartition des rôles au sein des entreprises multinationales (Bartlett & Ghoshal, 1989;Doz, Santos, & Williamson, 2001), l'internationalisation des activités de R&D a longtemps été jugée trop stratégique ou trop complexe pour être internationalisée (Chung & Yeaple, 2008;Florida, 1997). Les savoirs de conception nécessitant une expérience industrielle importante pour parvenir à une maitrise cognitive suffisante, sont également réputés plus délicats à internationaliser (Reddy, 2000;Reddy & Sigurdson, 1994).…”