Multinationals and R&D cooperation: empirical evidence from the Italian R&D survey

Using data on R&D performers active in Italy, we explore the effects of multinationality on the propensity to R&D cooperation. A fundamental departure from previous empirical literature is that we do not consider only subsidiaries of foreign MNEs but also domestic owned MNEs active in the observed country. First, the whole subset of firms active in Italy represented by multinationals – both foreign and domestic MNEs – exhibits the highest propensity to R&D cooperation. Second, foreign MNEs are better at R&D cooperating with foreign partners, but it is domestic owned MNEs that exhibit the highest propensity to R&D collaboration with local firms. By contrast, foreign MNEs have much the same propensity to enter local R&D cooperation as non-MNEs. This might reveal that the multinationality advantages of foreign MNEs – their superior technology and economies of common governance – are more than compensated by their “liabilities of foreignness” due to the extra-costs and risks of dealing with a relatively unfamiliar context. Third, when considering international R&D cooperation, foreign MNEs exhibit the highest premium, while domestic owned MNEs appear to have a lower propensity to collaborate abroad. Altogether, our results for Italy show that it is not foreignness but the specific combination of advantages and disadvantages of multinationality that explain R&D cooperation with both local and international partners.