R&D endowments at home driving R&D internationalisation: Evidence from the Italian business R&D survey

This study aims at unpacking the internal R&D determinants spurring a firm to invest in R&D abroad, that is owning R&D performing affiliates abroad. Differently from previous literature - mainly focusing on country level determinants as well as on motivations for the location choice of foreign R&D - we make a shift in the observation point. In particular, we dig deeper into the characteristics of firms' intra-mural R&D and the different types of R&D outsourcing to assess their association with R&D internationalisation. On the one hand, we account for the different types of R&D employees (share of researchers and technicians on R&D employees) and R&D performance (basic versus applied research; R&D performed in laboratories rather than in production facilities); on the other hand, we focus on a specific type of R&D outsourcing (to non-affiliated foreign partners, that is the “contract offshoring R&D”). The analysis is performed on an unbalanced panel of 33,476 observations referring to all Italian R&D performers over the 2003-2010 period. Our findings reveal that a more structured organisation of R&D at home (e.g. performing R&D in dedicated laboratories) and the propensity to outsource R&D to foreign non-affiliated partners are associated with a higher share of R&D internationalisation.