Globalization of R&D by US-based multinational enterprises

This paper examines patterns and determinants of overseas R&D investment by US-based manufacturing MNEs using a new panel dataset over the period 1990-2004 The analysis reveals that R&D intensity of operation of US MNE affiliates is determined mainly by the domestic market size overall R&D capability and cost of hiring R&D personnel There is no evidence to suggest that R&D specific incentives have a significant impact on inter-country differences in R&D intensity when controlled for other relevant variables Overall our findings cast doubts on the efficacy of efforts by host country governments to entice MNE affiliates to engage in domestic R&D activity in a context where R&D is becoming a truly global activity (C) 2010 Elsevier B V All rights reserved