The spatial distribution of foreign direct investment in R&D within host countries. An empirical examination of foreign subsidiaries in Spain
by Adelheid Holl; Ruth Rama
International Journal of Multinational Corporation Strategy (IJMCS), Vol. 1, No. 1, 2016

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.

Online publication date: Thu, 19-May-2016

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