Multinationality, R&D and productivity: Evidence from the top R&D investors worldwide

Research output: Contribution to journalArticle

Abstract

This paper investigates the effects of multinationality on firm productivity, and contributes to the literature in two respects. First, we argue that multinationality affects productivity both directly and indirectly through higher incentives to invest in R&D. Second, we maintain that the multinational depth and breadth have different direct effects on productivity and R&D. Using data from the top R&D investors in the world, we propose an econometric model with an R&D and a productivity equation that both depend on multinationality. We find: i) multinational depth has a positive effect on productivity, while the effect of multinational breadth is negative; ii) multinationality (along both dimensions) has a positive effect on R&D intensity, translating into an indirect positive effect on productivity; iii) the positive indirect effect is however not large enough to compensate the negative direct effect of multinational breadth.

Details

Authors
Organisations
External organisations
  • University of Reading
  • Fraunhofer Institute for Systems and Innovation Research
  • Kore University of Enna
  • European Commission, Joint Research Centre, Seville
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Business Administration

Keywords

  • Multinationality, Productivity, R&D
Original languageEnglish
Pages (from-to)405-416
JournalInternational Business Review
Volume26
Issue number3
Early online date2016 Oct 27
Publication statusPublished - 2017 Jun
Publication categoryResearch
Peer-reviewedYes