How does Internationalisation affect the productivity of R&D activities in large innovative firms? A conditional nonparametric investigation

Abstract

This work explores the relationship between multinational R&D and innovation productivity among top corporate knowledge and R&D producers by adopting a twofold concept of internationalisation: (1) the firm’s degree of R&D internationalisation, and (2) the firm’s geographic diversification. We model the patent production process with an appropriate and robust conditional Data Envelopment Analysis (DEA) estimator, using a unique database of firms that matches financial indicators and patent information. Our results reinforce the fundamental role of internationalisation in the knowledge production process when the internationalisation process is properly and strategically managed. We interpret our empirical evidence through the theoretical lens of the learning theory of internationalisation, and we postulate that a high R&D intensity is a key driver to overcoming the challenges of internationalisation.