How do different drivers of R&D investment in foreign locations affect domestic firm performance? An analysis based on Swiss panel micro data

The aim of this article is to investigate the differences between specific motives of R&D investment in foreign locations with respect to: (i) the factors influencing the likelihood of foreign R&D and (ii) the impact of foreign presence on the parent firms' innovativeness and productivity. An econometric analysis of Swiss firm panel data (period 2000--2008; 2817 companies) shows, first, that factors related to firm-specific knowledge-oriented advantages are more important for explaining the likelihood of foreign R&D activities than factors reflecting disadvantages related to home location. Second, knowledge-oriented motives of foreign R&D positively influence the innovation performance of domestic firms, whereas market- and resource-oriented strategies have a positive impact on labor productivity. Copyright 2011 The Author 2011. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.