LECTURE 8
What are multinational companies?
Enterprise:
- Comprising entities in two or more countries
- Which operates under a system of decision-making policies
- In which entities are so linked, by ownership or otherwise, than one or more of them is able to exert a significant influence over the others
What is foreign direct investment?
Investment made by an economic actor in another country with the objective to perform business activities over which the agent will maintain strategic control in the long-run.
The direct investor acquires at least 10-25% of the capital
Which are the types of international R&D units?
Locally adapters -> market seeking adapt products to the locals
Locally integrated -> capable of autonomous innovation
International technology creator -> same R&D purposes as the core innovating centres in the home country
Technology scanning -> identify and generate new ideas
Which are the strategies for managing international R&D?
Center for global -> all innovations are conducted in a central hub
Local-for-local-> each unit independently innovates according to local preferences
Locally leveraged -> each unit innovates and shares their knowledge with the others
Globally linked -> innovation activities are decentralized but centrally coordinated
Which factors are to be taken into account for innovation strategy?
Quality of the available imput
Quality of the expected output
Operating efficiency
Which are the location drivers of R&D?
For research activities, the abailability of specialized knowledge
For development activities, market oriented: cost advantages, facility to scale-up manufacturing
Which is the effect of uncertainity on firm's internationalization of R&D depending on its technological capabilities?
High capabilities -> negative
Low capabilities -> positive
Because of prospect theory: high capability firms have more to loose
What is innovation offshoring?
Innovation offshoring includes all activities a firm performs to establish or steghthen innovation activities at a location outside the firm's home country