The relative importance of home and host innovation systems in the internationalisation of MNE R&D: a patent citation analysis

This paper examines the phenomenon of home base augmenting (HBA) R&D and home base exploiting (HBE) R&D. It has three novelties. First, we argue that any given R&D facility’s capacity to exploit and/or augment technological competences is a function not just of its own resources, but the efficiency with which it can utilise complementary resources associated with the relevant local innovation system. Just as HBA activities require proximity to the economic units (and thus the innovation system) from which they seek to learn, HBE activities draw from the parent’s technological resources as well as from the other assets of home location’s innovation system. Furthermore, we argue that most firms tend to undertake both HBE and HBA activities simultaneously. Second, we use patent citation data from the European Patent Office to quantify the relative HBA vs. HBE character of foreign-located R&D. Third, we do so for European MNEs located in the US, as well as US MNEs located in Europe. Our results indicate that both EU (US) affiliates in the US (EU) rely extensively on home region knowledge sources, although they appear to exploit the host country knowledge base as well. The HBA component of US R&D in Europe in chemicals, electronics and petroleum refining is stronger than their European counterparts, as is the case for European R&D activities in the US in engineering.economics of technology ;

The relative importance of home and host innovation systems in the internationalisation of MNE R&D: a patent citation analysis

host innovation systems, internationalisation, MNE, R&D

Knowledge Spillovers in Europe and its Consequences for Systems of Innovation

knowledge spillovers; innovation systems

Reverse Technology Transfer: A Patent Citation Analysis of the European Chemical and Pharmaceutical Sectors

One consequence of the internationalisation of R&D, particularly in high-tech sectors such as chemicals and pharmaceuticals, may be the transfer of foreign technology from the multinational to other firms in its home country. This phenomenon, which may be termed inter-firm reverse technology transfer, has not yet been directly analysed by either the international management literature or the literature on foreign direct investment. But its implications for policy – particularly in Europe – may be significant. Drawing on the evolutionary theory of the multinational, and on the concept of embeddedness, this paper is a first attempt at addressing this issue. We test the hypothesis of inter-firm reverse technology transfer by performing a patent citation analysis on a database of USPTO patents applied for by 24 chemical and pharmaceutical companies over the period 1980-99. Our findings suggest that multinationals act as a channel for the transmission of knowledge developed abroad to other home country firms. These results point to an alternative understanding of foreign direct R&D investment and its implications for both the home country’s technological activity, and its competitive performance in generalMultinational firms; patent citation; embeddedness; international technology transfer

Reverse Technology Transfer: A Patent Citation Analysis of the European Chemical and Pharmaceutical sectors

One consequence of the internationalisation of R&D, particularly in high-tech sectors such as chemicals and pharmaceuticals, may be the transfer of foreign technology from the multinational to other firms in its home country. This phenomenon, which may be termed inter-firm reverse technology transfer, has not yet been directly analysed by either the international management literature or the literature on foreign direct investment. But its implications for policy – particularly in Europe – may be significant. Drawing on the evolutionary theory of the multinational, and on the concept of embeddedness, this paper is a first attempt at addressing this issue. We test the hypothesis of inter-firm reverse technology transfer by performing a patent citation analysis on a database of USPTO patents applied for by 29 chemical and pharmaceutical companies over the period 1980-99. Our findings suggest that multinationals, especially in the pharmaceutical sector, act as a channel for the transmission of knowledge developed abroad to other home country firms. These results point to an alternative understanding of foreign direct R&D investment and its implications for both the home country’s technological activity, and its competitive performance in general.economics of technology ;

Ethnic Scientific Communities and International Technology Diffusion

This study explores the importance of knowledge transfer for international technology diffusion by examining ethnic scientific and entrepreneurial communities in the US and their ties to their home countries. US ethnic research communities are quantified by applying an ethnic-name database to individual patent records. International patent citations con.rm knowledge diffuses through ethnic networks, and manufacturing output in foreign countries increases with an elasticity of 0.1-0.3 to stronger scientific integration with the US frontier. To address reverse-causality concerns, reduced-form specifications exploit exogenous changes in US immigration quotas. Consistent with a model of sector reallocation, output growth in less developed economies is facilitated by employment gains, while more advanced economies experience sharper increases in labor productivity. The ethnic transfer mechanism is especially strong in high-tech industries and among Chinese economies. The findings suggest channels for transferring codified and tacit knowledge partly shape the effective technology frontiers of developing and emerging economies.Technology Transfer, Tacit Knowledge, Productivity, Patents, Innovation, Research and Development, Entrepreneurship, Immigration, Networks.

The Patterns of Inter-firm and Inter-industry Knowledge Flows in the Netherlands

This paper presents a study of backward and forward patent citations in patents granted to firms and institutions in the Netherlands by the United States Patent and Trademark Office (USPTO). The study establishes different patterns of patent citation in recent Dutch patents belonging to different industrial classes. We run our model in the set of backward citations made in Dutch applicants’ patents during 1996-2006 and in the set of forward citations to patents issued to firms and organizations in the Netherlands during 1993-2006. We compare the patterns of knowledge utilization (represented by backward patent citations) and knowledge dissemination (represented by forward patent citations) and obtain evidence of inter- or intra-firm and inter- or intra-industry knowledge spillovers. In the context of effective competition and innovation policies we advocate for paying special attention to industry specifics when designing policy programs and measures directed at stimulating R&D cooperation and knowledge spillovers. We present evidence that policies for promoting better knowledge exchange among firms should also distinguish between the measures for promoting the inward and the outward knowledge flows for companies in the Netherlands.knowledge flows, R&D spillovers, backward and forward patent citations

Regional innovation measured by patent data – does quality matter?

Patent data play an important role as indicators of inventive and innovative activity across regions. This paper examines if the geographical distribution changes and in what direction if patent data are quality-adjusted. A quality index is constructed by means of factor analysis on the indicators forward citations and backward citations, family size and opposition incidence. Patent data over Swedish regions 1982-1999 are used to examine the distribution. The paper examines how the distribution has changed over time in the aggregate and on a technology-by-technology basis. When accounting for quality, patents become much more geographically concentrated than raw patents granted. Moreover, both concentrations have increased over time. Of the quality indicators, backward citations and family size seem to contribute most to concentration.Regions; patents; patent quality; Sweden.

Against the one-way-street: Analyzing knowledge transfer from industry to science

This study aims at analyzing the differences in the factors that influence the probability of knowledge transfer within industry and from industry to science in the biotechnology sector. In order to model these knowledge flows a citation analysis on the basis of patent data was conducted and a weighted bivariate probit model was estimated on the citation probability of industry and science on the basis of a combined sample of citing and cited patent pairs and an equal number of control patent pairs. The empirical results suggest that there are considerable differences in the citation probability. Cultural closeness for instance has a positive effect on the citation probability from industry to industry while the citation probability of scientific institutions is not affected by cultural distance. --Technology transfer,patent citation analysis,biotechnology industry

Globalisation of Innovation The Role of Multinational Enterprises

This paper undertakes a brief evaluation of the trends in the internationalization of innovative activities. We provide a taxonomy of R&D internationalization strategies, and discuss the main relevant theoretical and empirical issues, before discussing the centripetal and centrifugal forces underlying the nature and evolution of cross border innovation. We address the issue of international technology partnering as a key strategy that is complementary to the internationalisation of innovative activities through internal means, before raising important policy dimensions and directions for future research that derive from these debates.R&D internationalization, globalisation, multinationals, alliances, technology policy