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 ;

Multinationals and US Productivity Leadership: Evidence from Great Britain

We study the productivity of US owned plants in the UK. Using a new dataset that identifies foreign and domestic MNEs, we find that UK MNEs are less productive than US affiliates, but as productive as non US foreign affiliates. We investigate the source of the US and MNE advantage. We find evidence confirming that the MNE advantage is driven by sharing superior firm level assets across plants and by cherry picking the better plants in a country. The additional superiority of US firms seems entirely driven by their particular ability to takeover the best British plants. Thirdly, the study features a novel approach to TFP calculation.Multinational Firms, Productivity, Foreign Ownership, US leadership, Double Fixed-Effects

Service Traders in the UK

We provide a novel set of stylized facts on firms engaging in international trade in services, using unique firm-level data on services exports and imports in the United Kingdom in 2000- 2005. Less than 10% of firms trade in services but they can be found in all sectors of the UK economy. While the services sector accounts for 80% of total exports and imports, the frequency and trade intensity of services traders is often higher in sectors such as high- tech manufacturing. Services traders are bigger, more productive and are more likely to be foreign owned or part of a multinational enterprise. These 'trade premia' are smaller then for goods traders, however, with the exception of skill intensity which is higher among services traders. There are also significant differences between exporters and importers of services. Furthermore, we show that most firms only export or import a single service type and trade with a small number of countries. Trade volume, employment, turnover and value added are highly concentrated among a small group of firms trading with many countries and/or in many services types. These firms are characterised by bigger size and higher than average productivity, all of which seem to be principally correlated with more trade along the intensive margin (trade per services and country) .although there are a number of noteworthy exceptions. Interestingly, trade is also concentrated within .rms. The top export and import destination make up 70% of the average firm's total trade and the top services type around 90%. This strong concentration is still present among firms trading with many countries and/or in many products.International trade, services, firm-level evidence

Does it matter where patent citations come from? Inventor versus examiner citations in European patents

patent, European, citations

Using multi-hub structures for international R&D: Organizational inertia and the challenges of implementation

Over the last decade or so, multinational enterprises (MNEs) have shifted from centralised hub structures to multi-hub structures. While these new structures provide greater potential for cross-fertilization of technologies and access to locationspecific competences, promoting effective knowledge transfer within an MNE – especially in their R&D activities - presents significant managerial challenges. Using evidence collected on the R&D activities of MNEs in the pharmaceutical sector, this paper analyses the challenges associated with complexities of promoting and integrating knowledge flows in the face of inter-unit geographical, organizational and technological distance. MNEs are faced with organizational inertia that hinders efficient lateral communication and inter-unit knowledge transfer, and the evidence suggests that while socialization mechanisms help overcoming some of these bottlenecks, there remain a number of obstacles in optimising knowledge flows in physically and technologically dispersed R&D facilities.economics of technology ;

Does it matter where patent citations come from? Inventor versus examiner citations in European patents

This paper investigates whether the distinction between patent citations added by the inventor or the examiner is relevant for the issue of geographical concentration of knowledge flows (as embodied in citations). The distinction between inventor and examiner citations enables us to work with a more refined citation indicator of knowledge flows. We use information in the search reports of patent examiners at the European Patent Office to construct our dataset of regional patenting in Europe, and apply various econometric models to investigate our research question. The findings point to a significant localization effect of inventor citations, after controlling for various other factors, and hence suggest that knowledge flows are indeed geographically concentrated. This holds true also for a sub-sample of patents owned by 169 large multinational enterprises (MNEs). The results for the sample of MNEs suggest that multinational firms seek out specific regional knowledge specializations (and hence at least partly reinforce geographical concentration), but are also able to transfer knowledge "easier" over larger distances.research and development ;

A novel approach to national technological accumulation and absorptive capacity: Aggregating Cohen and Levinthal

The paper develops a more precise specification and understanding of the process of national-levelknowledge accumulation and absorptive capabilities by applying the reasoning and evidence from the firm-levelanalysis pioneered by Cohen and Levinthal (1989, 1990). In doing so, we acknowledge that significant cross-bordereffects due to the role of both inward and outward FDI exist and that assimilation of foreign knowledge is not onlyconfined to catching-up economies but is also carried out by countries at the frontier-sharing phase. We postulate anon-linear relationship between national absorptive capacity and the technological gap, due to the effects of thecumulative nature of the learning process and the increase complexity of external knowledge as the country approachesthe technological frontier. We argue that national absorptive capacity and the accumulation of knowledge stock aresimultaneously determined. This implies that different phases of technological development require different strategies.During the catching-up phase, knowledge accumulation occurs predominately through the absorption of trade and/orinward FDI-related R&D spillovers. At the pre-frontier-sharing phase onwards, increases in the knowledge base occurlargely through independent knowledge creation and actively accessing foreign-located technological spillovers, interalia through outward FDI-related R&D, joint ventures and strategic alliances.economics of technology ;