The links between international production and innovation: a double network approach

This paper examines the changing role of multinationals in the global generation, adoption and transfer of innovation. It is argued that the combination of traditional asset exploiting objectives with increasing asset seeking activities entails a transition of multinationals towards a double network structure. On the one hand multinationals are more and more characterised by the interconnection of a large number of internal units that are deeply involved in the company’s use, generation and absorption of knowledge. On the other hand, units belonging to the internal network tend to develop external networks with other firms and institutions that are located outside the boundaries of the multinational firm, in order to increase the potential for use, generation and absorption of knowledge. Extending the analysis to a more general level, it is suggested that each of the external actors with which multinationals are interconnected across countries are themselves involved in extensive webs of relationships with other firms and institutions. By becoming embedded in different local contexts, multinational firms act as bridging institutions connecting a number of geographically dispersed economic and innovation systems. As a result, they are conditioned by, and contribute to, the evolution of different contexts in which they operate.innovation, multinational firms, networks.

A double network approach to international production.

This paper discusses some key implications of the view, emerged in the literature, that multinational firms organise their activities by connecting internal networks of subsidiaries with external networks of contractual relationships. It is argued that this view provides some useful elements for a more comprehensive theory of multinational change and for the analysis of the impact of internationalisation on economic systems of origin and destination. A “double network approach” to international production implies a fundamental change of focus from the “center” of multinationals – the headquarters – to the “periphery” of transnational organisations, and from individual decision making units to collective choices involving a variety of inter-linked actors. Moreover, it highlights the complexities of decision making processes associated to the increasing number and interdependencies of internal and external actors involved in international production.Foreign Investment, Multinational Firm.

Productivity Gaps, Inward Investments and Productivity of European firms

Using a balanced panel of firm-level data on the manufacturing industry in France, Italy and Spain over the 1993-1997 period, this paper examines the impact of foreign presence on the productivity of domestic enterprises. We innovate on existing literature by using firm-level data comparable across countries. A generalisation of the results obtained for individual countries is attempted by introducing two key variables in the analysis of the impact of inward investments on domestic performances: productivity gaps between foreign and domestic firms, and productivity levels of MNEs. It is shown that it is the combination of high gaps and high levels of foreign productivity that has the most positive effects. This leads to a critical consideration of both the “catching up” hypothesis, which identifies a positive relation between the size of technological gaps and growth opportunities induced by foreign investments; and the “technological accumulation” hypothesis, which stresses the role of domestic absorptive capacity and of coherence between foreign and domestic technology as determinants of virtuous effects of inward investments. Based on these results, policy implications are drawn, concerning the selection and promotion of inward investments in advanced countries.Multinationals, Technology Gap, Productivity

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

Multinational firms, global value chains and the organization of technology transfer

This paper combines insights from different streams of literature to develop a more comprehensive framework for the analysis of technology transfer via value chain relationships. We integrate the existing literature in three ways. First, we consider value chain relationships as a multi-facet process of interaction between buyers and suppliers, involving different degrees of knowledge transmission and development. Second, we assess whether and to what extent value chain relationships are associated with the presence of multinationals and with their embeddedness in the host economy. Third, we take into account the capabilities of local firms to handle the technology as a factor influencing knowledge transfer through value chain relationships. Using data on 1385 firms active in Thailand in 2001-2003, we apply a multinomial logit model to test how the nature and intensity of multinational presence and the competencies of local firms affect the organisation of international technology transfer. We find that knowledge intensive relationships, which are characterized by a significant transmission of technology along the value chains, are positively associated with the presence of global buyers in the local market, with the efforts of MNCs to adapt technology to local contexts, and with the technical capabilities of domestic firms. By contrast, the age of subsidiaries and the share of inputs purchased locally appear to increase the likelihood of value chain relationships with a lower technological profile. Key words: Global value chain, multinationals, technology transfer, knowledge spilloversGlobal value chain, multinationals, technology transfer, knowledge spillovers

What do we know from the literature on public e-services?.

Public e-services are a broad and growing research field in which scholars and practitioners from different domains are involved. However, the increasing attention devoted to public e-services only partially captures the extreme variety of aspects and implications of the diffusion of information and communication technologies at all levels of public administrations. The paper aims to develop a meta-analysis of the literature on the delivery, diffusion, adoption and impact of public e-services and examines current research trends in terms of differences in methodologies, approaches and key indicators across five service platforms: eGovernment, eEducation, eHealth, Infomobility and eProcurement. We examined 751 articles appeared in 2000-2010 in the top international academic journals listed in the Social Science Citation Index (SSCI) of the Institute for Scientific Information (ISI), as classified in the following fields: Communication, Economics, Education, Environmental Studies, Geography, Health Policy & Services, Information Science & Library Science, Law, Management, Planning & Development, Public Administration, Transportation and Urban Studies. We highlight a significant heterogeneity in scientific production across service domains, countries covered by empirical analyses, indicators used, and affiliation of authors. We also show an increasing diffusion of quantitative methods applied to different research fields which still appears to be constrained by data limitations. The overall picture emerging from the analysis is one characterized by largely unexplored service domains as well as scarcely analyzed issues both across and within individual service platforms (e.g. front vs. back office issues). Thus many research opportunities seem to emerge and need to be exploited from different disciplinary perspectives in this field of analysis.eGovernment, eEducation, eHealth, Infomobility, eProcurement, Bibliometrics, Metaanalysis, Innovation in services, Public e-services

Exporters, Importers and Two-way Traders: the Links between Internationalization, Skills and Wages

How do trade activities affect firms’ employment and wages structures? Using firm level data on Italian manufacturing firms, this paper adds to the existing literature, by assessing how the degree of involvement in international trade impacts on workforce composition, earning levels and wage inequality. We differentiate firms involved in both trading activities - namely two-way traders - from firms that only export, and from those that only import. We show that two-way traders have a higher propensity to employ non-production workers, exhibit significant wage gaps, but also pay higher wages for both production and non production workers, relative to non internationalized firms and to firms which are involved only in either export or import. The paper also looks at how the wages and the skill structure of the trading firms change with the country of destination and origin and with the firms’ sectoral and geographical diversification.heterogeneous firms; exports; imports; wage inequality; skills.

Location choices of multinational firms in Europe: the role of national boundaries and EU policy

What determines multinational firms’ location choices in Europe? Do national boundaries matter in location decisions? To what extent are European regional policies (Structural and Cohesion Funds) able to mitigate the agglomeration forces at work? Do location determinants differ for EU and US MNEs? In this paper, we address these questions using data from 5,761 foreign subsidiaries established in 55 regions in 8 EU countries over the period 1991-1999 and estimating a nested logit model of location choices. Controlling for regional market size and potential, agglomeration economies and labor markets conditions, we find that EU policy, proxied by Cohesion Fund and Objective 1 eligibility, played a significant role in attracting multinationals. Differences emerge in determinants of EU and US multinationals location choices, with special reference to the role of labor markets. National boundaries do not seem to affect location decisions, with the relevant exception of Italy. Results suggest that multinational firms’ perceive European regions as geo-economic aggregates different from the actual political boundaries of countries.

Location choices of multinational firms in Europe: the role of EU cohesion policy

In this paper we examine the determinants of location choices of multinational firms in Europe. In particular, we focus on the role of EU Cohesion Policy in attracting foreign investors from both within and outside Europe. Using data on 5,509 foreign subsidiaries established in 50 regions in 8 EU countries over the period 1991-1999, we estimate a mixed logit model of the determinants of MNFs’ location choices. We find that, after controlling for the role of agglomeration economies as well as a number of other regional and country characteristics and allowing for a very flexible correlation pattern among choices, Structural and Cohesion funds allocated by the EU to laggard regions have indeed contributed to attracting multinationals. These policies as well as other determinants play a different role in the case of European investors as opposed to non European ones.Europe; Foreign Direct Investments; Location Choice; Mixed Logit Models

The links between internationalization, skills and wages. The role of differences across firms and across partner countries.

Using firm level data on Italian manufacturing industry, we examine how trade activities are related to workforce composition and wages. We contribute to empirical research on these issues in three ways. First, we provide novel evidence that is consistent with multi-attribute models on firm heterogeneity and trade. In fact we show that even after controlling for various firm characteristics, including size and capital intensity, exporters still pay higher wages and employ more skilled workers than non exporters. Second, we consider the engagement of firms in international transactions, either by means of exports, imports or a combination of the two. We show that failing to control for the importing activities may bias upward export premia. Third, we look at how the wage and the employment structures of trading firms change with the country of destination and origin of trade flows. We find that wage and skill premia increase for both exporters and importers as they trade with more distant markets. Richer countries are instead associated with higher premia for importers and not for exporters.heterogeneous firms; exports; imports; productivity; market of destination and origin