CIAO DATE: 03/05

Multinationals Searching for R&D Spillovers

Abstract

This paper surveys the literature on R&D and technology spillovers as a motive for FDI. During the last years, a growing body of theoretical studies has generated formal arguments supporting the economic rationale for such behaviour. Yet, theoretical contributions are clustered within a few schools and a wider approach is necessary in order to understand the mechanisms that relate R&D spillovers to FDI. The empirical literature is more numerous, but provides ambiguous conclusions with respect to the strength of this motive. Micro studies provide less supportive results as compared to studies based on more aggregate data. Studies based on patent information are generally supportive to the existence of this motive.

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