Recent Location of Foreign-owned Research and Development Activities by Large Multinational Corporations in the European Regions: The Role of Spillovers and Externalities

Abstract

Cantwell J. and Piscitello L. (2005) Recent location of foreign-owned research and development activities by large multinational corporations in the European regions: the role of spillovers and externalities, Regional Studies39, 1-16. This paper examines the role of spillovers and externalities in influencing the recent siting of foreign-owned research and development activities in European regions. In accordance with the literature on knowledge creation in multinational corporations, the location of foreign-owned research tends to agglomerate depending upon the potential for the following different sources of spillovers and externalities: (1) intra- industry spillovers or specialization externalities associated with the presence of a wide-ranging collection of firms active in the same sector; (2) inter-industry spillovers or diversity externalities associated with the co-presence of firms working in different fields; and (3) science-technology spillovers and externalities stemming from the presence of a munificent scientific and educational infrastructure. Additionally, benefits from spillovers decline with distance, but this holds especially for intra- and inter-industry spillovers. Cantwell J. et Piscitello L. (2005) L'implantation recente dans les regions d'Europe des centres de recherche a capital majoritaire etranger par les societes multinationales: le role des retombees et des effets externes, Regional Studies39, 1-16. Cet article cherche a examiner le role des retombees et des effets externes quant a l'implantation recente dans les regions d'Europe des centres de recherche a capital majoritaire etranger. Conformement a la documentation sur la creation de la connaissance dans les societes multinationales, les emplacements des centres de recherche a capital majoritaire etranger ont tendance a s'agglomerer en fonction des differentes sources de retombees et d'effets externes: a savoir, (1) des retombees intraindustrielles ou des effets externes dus a la specialisation, qui s'associent a la presence d'un large parc d'entreprises du meme secteur; (2) des retombees interindustrielles ou des effets externes dus a la diversite, qui s'associent a la presence des entreprises de divers secteurs; et (3) des retombees scientifiques et technologiques, et des effets externes qui remontent a la presence d'une infrastructure scientifique et scolaire avantageuse. En plus, il s'avere que les retombees diminuent en fonction de la distance, surtout pour les retombees intra et interindustrielles. Cantwell J. und Piscitello L. (2005) Fur in auslandischem Besitz befindliche Forschungs-und Entwicklungsunternehmen neuerlich in europaischen Regionen von grossen multinationalen Firmen gewahlte Standorte: die Rolle von Verbreitung und externen Effekten, Regional Studies39, 1-16. Dieser Aufsatz untersucht die Rolle von Verbreitung und externen Effekten bei der Beeinflussung kurzlich erfolgter Standortwahlen fur in auslandischem Besitz befindliche Forschungs-und Entwicklungunternehmen in europaischen Regionen. In ubereinstimmung mit d...

Technological diversity, scientific excellence and the location of inventive activities abroad: the case of nanotechnology

“…In the economic geography literature, it has been suggested that the patent scope is also a good proxy to measure the presence of inter-industry spillovers and diversity externalities (Cantwell and Piscitello 2005). We interpret a significant and positive coefficient of our measure of technological diversity as a signal of the presence of these positive externalities.…”

“…Similarly, Odagiri and Yasuda (1996), in their examination of R&D activities by Japanese multinationals abroad, find that industries with larger local sales are more likely to engage in overseas R&D. Cantwell and Piscitello's (2005) regional analysis of inter-industry spillovers and diversification externalities in Europe finds a positive (but weak) impact of regional Gross Domestic Product (GDP) on the number of patents awarded to subsidiaries. To control for the influence of market size we use the Gross Domestic Product and of Gross Domestic Product per capita of host countries.…”

“…Fernández-Ribas, Shapira and Youtie (2007) for Malaysia find that the average level of domestic R&D expenditures explain to a greater extent the probability that a MNC engages in innovation activities in all the parts of the innovation value chain , including R&D, design and marketing activities, in the host country. Cantwell and Piscitello (2005) find evidence of the effects of regional intra-and interindustry spillovers on the probability that a US affiliate engages in R&D. To control for the influence of overall scientific strength of host countries, we propose to include a continuous variable on the number of scientific and technical publications (in all fields of science) originating in each host country.…”

Agglomeration Economies and the Location of Foreign Direct Investment: Empirical Evidence from Romania

“…The measure is included to account for inter-industry knowledge spillovers and diversity externalities (economies arising from cross-fertilization of ideas across industries). 26 CANTWELL and PISCITELLO (2005) provide evidence for four Western European countries (Germany, UK, France and Italy) that diversity externalities make a region more likely to attract foreign-owned technological activities. We would not expect, however, these externalities to play a major role for the location of foreign investors in labor-intensive production processes in transition economies.…”

How do different drivers of R&D investment in foreign locations affect domestic firm performance? An analysis based on Swiss panel micro data

“…In these studies, the two types of foreign R&D are discussed under the heading of "asset-exploiting" (homebase-exploiting, competence-exploiting) strategies versus "asset-augmenting" (home-base augmenting, competence-creating) strategies. Moreover, it was shown that geographic proximity to universities and highly innovative firms, in accordance with the asset-augmenting strategy, offers great opportunities for profiting from knowledge spillovers (Jaffe et al, 1993;Cantwell and Piscitello, 2005). Further, based on Swiss data, Hollenstein (2009) identified four categories of firms ("clusters") characterized by distinct combinations of motives for foreign investments in R&D. Two of the clusters are clearly related to asset-augmenting strategies, the third one to the asset-exploiting strategy, whereas the foreign engagement of firms belonging to the fourth category is based primarily on cost considerations.…”