Home base-compensating R&D

Indicators, public policy, and ramifications for multinational firms

Mark Lehrer, Kazuhiro Asakawa, Michael Behnam

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

The situation in which a multinational firm compensates for comparative weakness in home-country R&D by locating vital R&D activities in foreign countries with a stronger R&D base has generally been considered a fairly marginal phenomenon. Yet home base-compensating R&D by MNCs is more prevalent and more important in its effects than generally assumed. Given intensifying competition among nations for R&D investment by MNCs, home base-compensating R&D may help stimulate R&D reform in the home country, as illustrated with the example of German biotechnology. The probability that home base-compensating R&D can stimulate R&D reform in the firm's home country is highest when practiced by "high-profile players" in sectors that are science-based and that are either strategic (inter-industry economic and knowledge spillovers), feature above-average growth, and/or are of high political importance. To the extent that home base-compensating R&D by MNCs can potentially encourage policy reforms in their home country, this adds a new level of complexity to discussions about the role of corporations in influencing public policy as a component of their corporate social responsibility.

Original languageEnglish
Pages (from-to)42-53
Number of pages12
JournalJournal of International Management
Volume17
Issue number1
DOIs
Publication statusPublished - 2011 Mar

Fingerprint

Multinational firms
Public policy
Home country
Biotechnology
Knowledge spillovers
Policy reform
Corporate Social Responsibility
Industry
Economics

Keywords

  • Biotechnology
  • Germany
  • Home base-compensating R&D
  • Multinational corporations
  • National systems of innovation
  • Public policy
  • R&D reform

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management
  • Finance

Cite this

Home base-compensating R&D : Indicators, public policy, and ramifications for multinational firms. / Lehrer, Mark; Asakawa, Kazuhiro; Behnam, Michael.

In: Journal of International Management, Vol. 17, No. 1, 03.2011, p. 42-53.

Research output: Contribution to journalArticle

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