Working Paper: NBER ID: w24453
Authors: Lee Branstetter; Britta Glennon; J. Bradford Jensen
Abstract: The location of US multinational foreign R&D has shifted significantly to include emerging markets in addition to traditional Western R&D hubs, resulting in two challenges for multinationals: (1) how to transfer knowledge across geographic distances, and (2) how to facilitate learning when local knowledge sources in given technological areas are inadequate. This paper argues that to overcome these challenges, multinationals utilize home country inventors on foreign affiliate inventor teams – and in particular on teams in locations with insufficiently specialized local knowledge stocks – to facilitate knowledge transfer. Empirical analysis of a comprehensive dataset of US multinational R&D and patenting activity provides robust support for this argument. The findings have important implications for understanding how countries can gain expertise in technical areas and how poor countries can escape the knowledge trap, and they provide insight into management of increasingly dispersed multinational global R&D networks, particularly in locations with relatively unspecialized local inventors.
Keywords: Knowledge Transfer; R&D Networks; U.S. Inventors; Multinational Corporations
JEL Codes: O31; O32; O57
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| U.S. inventors (O39) | presence on foreign affiliate research teams (F23) |
| presence on foreign affiliate research teams (F23) | knowledge transfer (O36) |
| initial knowledge transfer (O36) | reliance on U.S. inventors (O39) |
| local knowledge availability (D83) | dependency on U.S. inventors (O39) |
| lower knowledge stocks (D80) | likelihood of U.S. inventors on teams (O36) |