Search results

The essential investments in new product development (NPD) made by industrial companies entail effective management of NPD activities. In this context, performance measurement is one of the means that can be employed in the pursuit of effectiveness.

We examine the determinants of multinational firms’ propensity to conduct R&D activities in host countries, with specific attention to the influence of host countries’ university research. We consider heterogeneous locational drivers related to the type of R&D activity: basic research, applied research, development for local markets, and development for global markets. Drawing on official survey data on R&D activities by 498 Japanese multinational firms in 24 host countries and estimating two-stage models, we find that the likelihood that firms conduct R&D in a host country is generally increasing in the strength of university research. Conditional on a firm’s R&D presence, university research strength is associated with a greater propensity to conduct (basic) research activities rather than (local) development, while the intensity of host country university–industry collaboration is most strongly associated with applied research. Host country experience and the depth of the firm’s manufacturing presence are also associated higher propensities to engage in research.

The fragmentation of the production process is a major theme of research in international business. Trade benefits arise from the “slicing up” of the aggregate value chain, as well as the entry of new countries bearing low labor costs. If, initially, multinational corporations (MNCs) relocated only standardized, low-value manufacturing activities in new emerging economies (exploitative offshoring), now they are also offshoring their knowledge-intensive activities (explorative offshoring). In the past, the literature on internationalization was mainly focused on the characterization of the MNC as a specific monolithic organization active in the international production. In the present, numerous analyses have discussed the international location of R&D activities, mainly in advanced countries. The foreign R&D subsidiaries are still tightly linked to the headquarters, maintaining a controlled position. Future research must address two orders of issues. The first is the progressive autonomy of the foreign subsidiaries, which are more and more developing new and independent lines of research. This process leads MNCs to mobilize and leverage untapped pools of knowledge scattered around the world. The second is the R&D offshoring toward emerging economies. This complex process can be characterized as a move from the smile model discussed extensively by Ram Mudambi (where emerging economies were considered as pools of low-cost labor tout court) to a new model, called here the λ (lambda) model (where emerging economies are also pools of skilled labor). This paper will explore these new trends using some illustrative cases: L'Oréal (FR), Pfizer (US), ST Microelectronics (CH), and Geox (I). The cases reveal the double orientation of MNCs toward emerging economies, where both explorative and exploitative offshoring takes place.

The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.

“It should also be noted that the objective of convergence and equal distribution, including across under-performing areas, can hinder efforts to generate growth. Contrariwise, the objective of competitiveness can exacerbate regional and social inequalities, by targeting efforts on zones of excellence where projects achieve greater returns (dynamic major cities, higher levels of general education, the most advanced projects, infrastructures with the heaviest traffic, and so on). If cohesion policy and the Lisbon Strategy come into conflict, it must be borne in mind that the former, for the moment, is founded on a rather more solid legal foundation than the latter” European Commission (2005, p. 9)Adaptation of Cohesion Policy to the Enlarged Europe and the Lisbon and Gothenburg Objectives.

Purpose – This chapter addresses the participation of women (or lack of it) in industrial research and development (R&D), one of the key indicators of innovation.

Methodology/approach – The empirical investigation is based on a sample of 84 science- and technology-based small- and medium-sized enterprises (SMEs), engaged in new product development and innovation, operating in the United Kingdom.

Findings – The results demonstrate that the participation of women in R&D employment, particularly at senior levels, in the SME sector operating in England, is extremely low, partly attributed to some specific challenges faced by science and R&D-based SMEs. As a result of under-representation in the scientific research, women are missing out on the opportunities that are offered by ‘open innovation’ activities such as university–industry collaboration, access to external networks, exchange of knowledge and ideas and working on joint innovation projects with other scientific researchers elsewhere.

Research limitations/implications – There is a need for more rigorous research at firm levels to examine the cumulative effects of factors that could be translated into policy measures in order to attract more women to industrial research.

Practical implications – Specific policy measures should also focus on addressing barriers faced by SMEs to meet the specific needs of their female R&D employees, particularly those expecting or looking after young children while undertaking scientific research in laboratories.

Social implications – There is a need to raise a greater awareness and promote the take-up of numerous specific positive action measures, networking platforms and other promotional activities amongst women working in the private sectors, particularly those working in isolation in laboratories.

Originality/value of chapter – The findings are, fundamentally, based on an original and unique database. Women in industrial R&D is relatively a new topic of policy and research and their participation in R&D team within the science and technology-based SMEs in England has not been investigated before.

The European Union’s Digital Markets Act (DMA) calls for far-reaching changes to the way economic activity will occur in EU digital markets. Before its remedies are imposed, it is critical to assess their impacts on individual markets, the digital sector, and the overall European economy. The European Commission (EC) released an Impact Assessment in support of the DMA that purports to evaluate it using cost/benefit analysis.

An economic evaluation of the DMA should consider its full impacts on dynamic competition. The Impact Assessment neither assesses the DMA's impact on dynamic competition in the digital economy nor evaluates the impacts of specific DMA prohibitions and obligations. Instead, it considers benefits in general and largely ignores costs. We study its benefit assessments and find they are based on highly inappropriate methodologies and assumptions. A cost/benefit study using inappropriate methodologies and largely ignoring costs cannot provide a sound policy assessment.

Instead of promoting dynamic competition between platforms, the DMA will likely reinforce existing market structures, ossify market boundaries, and stunt European innovation. The DMA is likely to chill R&D by encouraging free riding on the investments of others, which discourages making those investments. Avoiding harm to innovation is critical because innovation delivers large, positive spillover benefits, driving increases in productivity, employment, wages, and prosperity.

The DMA prioritizes static over dynamic competition, with the potential to harm the European economy. Given this, the Impact Assessment does not demonstrate that the DMA will be beneficial overall, and its implementation must be carefully tailored to alleviate or lessen its potential to harm Europe’s economic performance.

To investigate the impact of knowledge-intensive FDI in the Chinese pharmaceutical industry, this study analyzes the activity of foreign MNEs operating in this context by exploring their innovative background, the organizational arrangements they use for local knowledge creation and the performance of their local innovative processes. Based on the analysis of the universe of USPTO pharmaceutical patents applied for between 1975 and 2010 and granted to foreign assignees utilizing the work of Chinese inventors, our results show that, while the presence of foreign MNEs in the Chinese pharmaceutical industry entails a strong potential for positive externalities that could enhance the performance of the local innovation system, such externalities do not completely materialize yet, likely because of local actors’ limited absorptive capacity.