Abstract
This paper examines the level of innovative performance sourced from foreign research and development (RD headquarters (HQ), host location and R&D subsidiary. Although numerous research studies have focused their interest on the above aspect, the multilevel nature of these three parameters is still greatly ignored. The empirical analysis draws on a dataset of 173 R&D subsidiaries classified by 57 parent companies (HQs) and 25 host locations (foreign countries). Accordingly, the contribution of this study is principally of a methodological nature, since a cross-classified multilevel model (MLM) is implemented using three different data sources (patent data, survey-based data and country-level data). The results suggest that the HQ?s influence is almost four times more important than host location aspects with respect to their total impact on the R&D subsidiary?s innovative performance. As concerns the multilevel regression results, it is suggested that collaboration between scientists belonging to different nationalities within the R&D subsidiary is a positive indicator of innovative performance. Furthermore, R&D subsidiaries mandated by their HQs to develop new products rather than improvements on existing inventions are found to perform better.
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