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

Castellani, Davide LU ; Montresor, Sandro; Schubert, Torben LU and Vezzani, Antonio (2016) In International Business Review
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... (More)

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.

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Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
epub
subject
keywords
Multinationality, Productivity, R&D
in
International Business Review
publisher
Elsevier
external identifiers
  • scopus:85005978372
  • wos:000401389900001
ISSN
0969-5931
DOI
10.1016/j.ibusrev.2016.10.003
language
English
LU publication?
yes
id
3b0cc56e-dc8d-4c92-83ed-4f0e147193cb
date added to LUP
2017-02-17 10:07:16
date last changed
2017-09-18 11:33:17
@article{3b0cc56e-dc8d-4c92-83ed-4f0e147193cb,
  abstract     = {<p>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&amp;D. Second, we maintain that the multinational depth and breadth have different direct effects on productivity and R&amp;D. Using data from the top R&amp;D investors in the world, we propose an econometric model with an R&amp;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&amp;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.</p>},
  author       = {Castellani, Davide and Montresor, Sandro and Schubert, Torben and Vezzani, Antonio},
  issn         = {0969-5931},
  keyword      = {Multinationality,Productivity,R&D},
  language     = {eng},
  month        = {10},
  publisher    = {Elsevier},
  series       = {International Business Review},
  title        = {Multinationality, R&D and productivity : Evidence from the top R&D investors worldwide},
  url          = {http://dx.doi.org/10.1016/j.ibusrev.2016.10.003},
  year         = {2016},
}