THE RELATIONSHIP BETWEEN INTERNATIONALIZATION AND INNOVATION IN MULTINATIONAL COMPANIES FROM EMERGING COUNTRIES
DOI:
https://doi.org/10.18568/internext.v16i1.597Keywords:
Internationalization, Research and development intensity, Patents generationAbstract
Objective: Evaluate the relationship between the degree of internationalization, the intensity of Research & Development (IP&D) and the generation of patents in multinational companies (MNCs) of the BRICS (Brazil, Russia, India, China, South Africa).
Method: The study sample corresponds to 219 EMNs from BRICS, whose data were obtained from 2002 to 2010 from two databases: Thomson One Datastream and Compustat Data. Analyzes were performed by multiple regression.
Results: The results found were (i) the more internationalized the MNCs, the more they invest in R&D; (ii) IP&D has a positive impact on patent applications; (iii) internationalization increases IP&D, which in turn increases patents. The results differ by the size of the companies, with the impacts of internationalization on innovation being greater for smaller companies, and the impact of IP&D on the generation of patents being greater for larger companies.
Originality/relevance: Of the various forms of relationship between innovation and internationalization, the evidence for obtaining knowledge from internationalization is relatively recent and, therefore, the impact of internationalization on innovation has been the focus of more current research. However, a large part of the studies focuses on a single country, mainly developed countries. Therefore, it is of great relevance to study this theme in developing countries.
Contributions: This study contributes to the advance in the literature on internationalization, proving empirically that, as in developed countries, internationalization in BRICS has a positive effect on innovation.
Contributions for practice: Study shows the need to use international expansion strategy as a tool to increase investment capacity in innovation.
Downloads
References
Altomonte, C., Aquilante, T., Békés, G., & Ottaviano, G. I. P. (2013). Internationalization and innovation of firms: Evidence and policy. Economic Policy, 28(76), 663-700. doi:10.1111/1468-0327.12020
Altuzarra, A. (2019). R&D and patents: is it a two way street?. Economics of Innovation and New Technology, 28(2), 180-196. doi: 10.1080/10438599.2018.1449726
Andrade, A. M. F., & Galina, S. V. R. (2013). Efeitos da internacionalização sobre o desempenho de multinacionais de economias em desenvolvimento. Revista de Administração Contemporânea, 17(2), 239-262. doi:10.1590/S1415-65552013000200007
Arundel, A. (2001). The relative effectiveness of patents and secrecy for appropriation. Research Policy, 30(4), 611-624. doi:10.1016/S0048-7333(00)00100-1
Awate, S., Larsen, M. M., & Mudambi, R. (2015). Accessing vs sourcing knowledge: A comparative study of R&D internationalization between emerging and advanced economy firms. Journal of International Business Studies, 46(1), 63-86. doi:10.1057/jibs.2014.46
Barrios, S., Görg, H., & Strobl, E. (2003). Explaining firms’ export behavior: R&D, spillovers and the destination market. Oxford Bulletin of Economics and Statistics, 65(4), 475-496. doi:10.1111/1468-0084.t01-1-00058
Belenzon, S., & Patacconi, P. (2013). Innovation and firm value: An investigation of the changing role of patents, 1985–2007. Research Policy, 42(8), 1496-1510. doi:10.1016/j.respol.2013.05.001
Blind, K., Edler, J., Frietsch, R., & Schmoch, U. (2006). Motives to patent: Empirical evidence from Germany. Research Policy, 35(5), 655-672. doi:10.1016/j.respol.2006.03.002
Bratti, M., & Felice, G. (2012). Are exporters more likely to introduce product innovations? The World Economy, 35(11), 1559-1598. doi:10.1111/j.1467-9701.2012.01453.x
Cañibano, L., García-Ayuso, M., & Sánchez, M. P. (2000). Shortcomings in the measurement of innovation: Implications for accounting standards setting. Journal of Management and Governance, 4(4), 1-24. doi:10.1023/A:1009955015494
Capaldo, A., Lavie, D., & Petruzzelli, A. (2014). Knowledge maturity and the scientific value of innovations: The roles of knowledge distance and adoption. Journal of Management, 43(2), 503-533. doi: 10.1177/0149206314535442
Capar, N., & Kotabe, M. (2003). The relationship between international diversification and performance in service firms. Journal of International Business Studies, 34(4), 345-355. doi:10.1057/palgrave.jibs.8400036
Cázares, C. C., & Filipescu, D. A. (2014). Measuring the effects of internationalization on technological innovation efficiency. Paper presented at the DRUID Society Conference, Copenhagen. Retrieved from http://druid8.sit.aau.dk/acc_papers/jcp48rnj4xyvfo7oc2i4d563bhjs.pdf
Chatenier, D., Verstegen, J., Biemans, H., Mulder, M., & Omta, O. (2010). Identification of competencies for professional in open innovation teams. R&D Management, 40(3), 271-280. doi:10.1111/j.1467-9310.2010.00590.x
Chinloy, P., Jiang, C., & John, K. (2020). Investment, Depreciation and Obsolescence of R&D. Journal of Financial Stability, 49 , 1-11 . doi:10.1016/j.jfs.2020.100757
Ciabuschi, F., & Martín, O. M. (2012). Knowledge ambiguity, innovation and subsidiary performance. Baltic Journal of Management, 7 (2), 143-166. doi:10.1108/17465261211219787
Contractor, F. J., Kundu, S. K., & Hsu, C. C. (2003). A three-stage theory of expansion of international expansion: The link between multinationality and performance in the service sector. Journal of International Business Studies, 34(1), 5-18. doi:10.1057/palgrave.jibs.8400003
Crescenzi, R. & Rodrıguez-Pose, A. (2017). The geography of innovation in China and India. International Journal of Urban and Regional Research, 41( 6), 1010-1027. doi: 10.1111/1468-2427.12554.
Doz, Y. L., Santos, J., & Williamson, P. (2001). From global to metanational: How companies win in the knowledge economy. Boston, MA: Harvard Business School Press.
Fernandes, L., Garcia, A., & Cruz, P. (2015). Desenvolvimento desigual na era do conhecimento: A participação dos BRICS na produção científica e tecnológica mundial. Contexto Internacional, 37(1), 215-253. doi:10.1590/S0102-85292015000100007
Filipescu, D. A., Prashantham, S., Rialp, A., & Rialp, J. (2013). Technological innovation and exports: Unpacking their reciprocal causality. Journal of International Marketing, 21(1), 23-38. doi:10.1509/jim.12.0099
Filippetti, A., Frenz, M., & Ietto-Gillies, G. (2012). The role of internationalization as a determinant of innovation performance: An analysis of 42 countries. Retrieved from http://ssrn.com/abstract=2114289
Gaur, S. A., & Kumar, V. (2009). International diversification, business group affiliation and firm performance: Empirical evidence from India. British Journal of Management, 20(2), 172-186. doi:10.1111/j.1467-8551.2007.00558.x
Grant, R. M., Jammine, A. P., & Thomas, H. (1988). Diversity, diversification and profitability among British manufacturing companies. Academy Management Journal, 31(4), 771-801. doi: 10.5465/256338
Hair, J. F., Jr., Anderson, R. E., Tatham, R. L., & Black, W. C. (1998). Multivariate data analysis. Upper Saddle River, NJ: Prentice Hall.
Hernández, H., Grassano, N., Tübke, A., Amoroso, S., Csefalvay, Z., and Gkotsis, P.: (2019). The 2019 EU Industrial R&D Investment Scoreboard; EUR 30002 EN; Publications Office of the European Union, Luxembourg, 2020, ISBN 978-92-76-11261-7, doi:10.2760/04570.
Hitt, M. A., Hoskisson, R. E., & Kim, H. (1997). International diversification: Effects on innovation and firm performance in product-diversified firms. Academy of Management Journal, 40(4), 767-798. doi: 10.5465/256948
Hoskisson, R. E. (1987). Multidivisional structure and performance: The contingency of diversification strategy. Academy of Management Journal, 30(4), 625-644. doi:10.5465/AMBPP.1987.17533710
Kobrin, S. J. (1991). An empirical analysis of the determinants of global integration. Strategic Management Journal, 12(S1), 17-37. doi:10.1002/smj.4250120904
Kostopoulos, K., Spanos, Y. E., & Prastacos, G. P. (2002). The resource-based view of the firm and innovation: Identification of critical linkages. Paper presented at the Second European Academy of Management Conference, Stockholm.
Kotabe, M. (1990). The relationship between offshore sourcing and innovativeness of US multinational firms: An empirical investigation. Journal of International Business Studies, 21(4), 623-638. doi:10.1057/palgrave.jibs.8490344
Kyläheiko, K., Jantunen, A., Puumalainen, K., Saarenketo, S., & Tuppura, A. (2011). Innovation and internationalization as growth strategies: The role of technological capabilities and apropriability. International Business Review, 20(5), 508-520. doi:10.1016/j.ibusrev.2010.09.004
Lu, J. W., & Beamish, P. W. (2004). International diversification and firm performance: The S-curve hypothesis. Academy of Management Journal, 47(4), 598-609. doi: 10.5465/20159604
Luo, Y., & Tung, R. L. (2007). International expansion of emerging market enterprises: A springboard perspective. Journal of International Business Studies, 38(4), 481-498. doi:10.1057/palgrave.jibs.8400275
Megna, P., & Klock, M. (1993). The impact of intangible capital on Tobin´s q in the semiconductor industry. The American Economic Review, 82(2), 265-269. Retrieved from http://www.jstor.org/stable/pdf/2117675.pdf
Michel, A., & Shaked, I. (1986). Multinational corporations vs. domestic corporations: Financial performance and characteristics. Journal of International Business Studies, 17(3), 89-100. doi: 10.1057/palgrave.jibs.8490435
Miller, D. (1996). A preliminary typology of organizational learning: Synthesizing the literature. Journal of Management, 22(3), 485-505. doi: 10.1177/014920639602200305
OECD (2018). Oslo Manual 2018: Guidelines for collecting, reporting and using data on innovation. 4th Ed. Organisation for Economic Co-operation and Development OECD.
Papanastassiou, M., Pearce, R., & Zanfei, A. (2019). Changing perspectives on the internationalization of R&D and innovation by multinational enterprises: A review of the literature. Journal of International Business Studies, 51(4), 623-664 . doi: 10.1057/s41267-019-00258-0
Ruigrok, W., & Wagner, H. (2003). Internationalization and performance: An organizational learning perspective. Management International Review, 43(1), 63-83. Retrieved from https://www.jstor.org/stable/pdf/40835634.pdf
Salomon, R. M., & Shaver, J. M. (2005). Learning by exporting: New insights from examining firm innovation. Journal of Economics & Management Strategy, 14(2), 431-460. doi:10.1111/j.1530-9134.2005.00047.x
Santos, J., Doz, Y., & Williamson, P. (2004). Is your innovation process global? MIT Sloan Management Review, 45(4), 31-37.
Schmiele, A. (2011). Drivers for international innovation activities in developed and emerging countries. Journal of Technology Transfer, 37(1), 98-123. doi:10.1007/s10961-011-9221-z
Soto, J. D., Manzaneque, M., Gonzáles-García, V., & Galache-Laza, T. (2019). A study of the moderating influence of R&D intensity on the family management-firm performance relationship: Evidence from Spanish private manufacturing firms. Business Research Quartely, 22(2), 105-118. doi.org/10.1016/j.brq.2018.08.007
Sugheir, J., Phan, P. H., & Hasan, I. (2012). Diversification and innovation revisited: An absorptive capacity view of technological knowledge creation. IEEE Transactions on Engineering Management, 59(4), 530-539. doi:10.1109/TEM.2011.2165726
Siedschlag, I., & Zhang, X. (2015). Internationalisation of firms and their innovation and productivity. Economics of Innovation and New Technology, 24(3), 183-203. doi: 10.1080/10438599.2014.918439
Teece, D. J. (2014). A dynamic capabilities-based entrepreneurial theory of the multinational enterprise. Journal of International Business Studies, 45(1), 8-37. doi:10.1057/jibs.2013.54
Teh, C. C., Kayo, E. K., & Kimura, H. (2008). Marcas, patentes e criação de valor. RAM – Revista de Administração Mackenzie, 9(1), 86-106. doi: 10.1590/S1678-69712008000100005
Thomas, D. E., & Eden, L. (2004). What is the shape of the multionationality performance relationship? The Multinational Business Review, 12(1), 89-110. doi:10.1108/1525383X200300015
Tsao, S. M., & Lien, W. H. (2011). Family management and internationalization: The impact on firm performance and innovation. Management International Review, 53(2) 189-213. doi:10.1007/s11575-011-0125-9
Xu, X., Xia, Y., Li, C. (2017). Influence of Chinese entrepreneurial companies’ internationalization on independent innovation: Input incentive effect and efficiency improvement effect. China Journal of Accounting Research, 10, 247–280. doi:10.1016/j.cjar.2017.05.001
Wang, Y., & Li-Ying, J. (2014). How do the BRIC countries play their roles in the global innovation arena? A study based on USPTO patents during 1990–2009. Scientometrics, 98(2), 1065-1083. doi:10.1007/s11192-013-1141-2
Williamson, P. J. (2015). The competitive advantages of emerging market multinationals: A re-assessment. Critical Perspectives on International Business, 11(3/4), 216-235. doi:10.1108/cpoib-02-2014-0008
Yang, D. (2012). Arm’s length and captive transactions: Patent-based view of control in internationalization. International Business Review, 21(4), 575-587. doi:10.1016/j.ibusrev.2011.07.004
Downloads
Published
How to Cite
Issue
Section
License
- The author(s) authorize the publication of the article in the journal;
- The author(s) ensure that the contribution is original and unpublished and is not being evaluated in other journal(s);
- The journal is not responsible for the opinions, ideas and concepts expressed in the texts because they are the sole responsibility of the author(s);
- In case an article will be approved for publication, the author will sign the term of Cession of Copyright to the journal, according to the download form.
