Title: The spatial distribution of foreign direct investment in R&D within host countries. An empirical examination of foreign subsidiaries in Spain

Authors: Adelheid Holl; Ruth Rama

Addresses: Institute of Public Goods and Policies (IPP), CSIC – Consejo Superior de Investigaciones Científicas, C/ Albasanz, 26-28, 28037 Madrid, Spain ' Institute of Economics, Geography and Demography (IEGD), CSIC – Consejo Superior de Investigaciones Científicas, C/ Albasanz, 26-28, 28037 Madrid, Spain

Abstract: We discuss the patterns of foreign direct investment in R&D within host countries and provide an empirical analysis for Spain by comparing foreign subsidiaries' R&D location patterns with that of domestic plants. We find that foreign subsidiaries' R&D is strongly concentrated in Madrid and Catalonia, the two largest Spanish regional agglomerations. Networked foreign subsidiaries involved in external technology sourcing still centralise to a greater extent their R&D activities in these leading regions. The concentration of foreign direct investment in R&D is significantly greater than that of domestic firms' R&D. The most technologically intensive foreign subsidiaries, however, are not attracted to Madrid, in spite of the alleged advantages of global cities in terms of openness and connectivity; but this is not a specificity of foreign subsidiaries as we observe a similar pattern for domestic firms.

Keywords: Spanish regions; foreign subsidiaries; spatial distribution; foreign direct investment; FDI; R&D location patterns; research and development; innovation; networking; Spain; domestic plants.

DOI: 10.1504/IJMCS.2016.076663

International Journal of Multinational Corporation Strategy, 2016 Vol.1 No.1, pp.65 - 86

Received: 21 Sep 2015
Accepted: 27 Jan 2016
Published online: 19 May 2016 *

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