Essays on corporate research and development and innovation activity

Abstract

This thesis consists of three essays on corporate Research and Development and innovation activity. The fi?rst essay investigates the effect of geographic distance between the home country of a Multinational Enterprise (MNE) and host countries where subsidiaries are located on MNEs' decision to carry out overseas R&D activities in the host market, using a sample of foreign affiliates located in Spain. My results show that geographic distance negatively affects the likelihood of a?ffiliates of foreign MNEs sourcing external R&D, but not that of carrying out internal R&D in the local market. Furthermore, the results also show that, conditional on doing external R&D, the greater the distance between the source and the host countries, the lower the probability of subsidiaries procuring R&D from local sources in the host country. In the second essay, I explore the effect of internal R&D factors and external R&D cooperation with universities on the innovativeness level of firms. Using Spanish data, I fi?nd that, while fi?rms, speci?cally those introducing more advanced innovations rely more on cooperation with universities, both internal and external R&D strategies are shown to be important determinants of fi?rms' innovativeness level. Moreover, ?firms endowed with higher absorptive capacity have a greater propensity to develop new knowledge. Yet I provide evidence that when associated to R&D cooperation, internal R&D capacity is likely to reduce the in?uence of the cooperation strategy on the innovativeness level of the firm. These fi?ndings suggest that, in Spain internal R&D activity of ?firms and the external knowledge acquired throug cooperation with universities do generate a substitution effect on their innovativeness level. The third essay of this thesis, which is a joint work with Szabolcs Blazsek and Pedro Mendi, examines the renewable energy innovations applied to the European context. In this paper we address two main issues: the determinants of renewable energy R&D intensity and the impact of renewable energy innovations on fi?rm performance. First our results provide evidence that renewable energy innovations are positively correlated with ?firms' contemporaneous R&D expenses and oil prices. However, it is likely that renewable energy fi?rms do not bene?t from knowledge spillovers from other ?rms to increase their innovations. We also ?find that renewable energy innovations have a signi?cant dynamic impact on ?firm performance.