R&D internationalization and the strategic relevance of the institutional framework in host locations

Abstract

The configuration of host national systems of innovation and the technological international networks established by multinational enterprises (MNE) can become key aspects for the internationalisation decision that may also concern knowledge related activities such as R&D. Through the combination of a theoretical model and empirical analysis, this paper shows to what extent institutional quality becomes a determinant factor for the attraction of foreign R&D activities, these latter being conditioned by the technological and productive capabilities of local contexts and the competitive pressures MNE face in foreign countries. Our contribution is a step further in the explanatory framework of R&D internationalisation and also provides new insights about what are the key reinforcement mechanisms for the attraction of new knowledge intensive investments.