On the innovativeness of foreign affiliates: Evidence from companies in The Netherlands [An article from: Research Policy]

This digital document is a journal article from Research Policy, published by Elsevier in 2006. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
In examining the distinctive contributions of foreign subsidiaries and domestic firms to innovative performance in Dutch manufacturing, the paper shows that foreign ownership is an important factor in explaining inter-firm differences affecting innovativeness. It characterizes innovativeness by distinguishing between products that are new to the firm ('imitative' innovations), and those products that are new to the market ('real' innovations). It uses firm-level data for 4780 firms which took part in the Community Innovation Survey (CIS-2) for 1996 in The Netherlands. It concludes that foreign subsidiaries are more innovative, they are more likely to introduce 'imitative' as well as 'real' innovations compared to domestic firms. In comparison with the population of innovative companies, however, there is greater heterogeneity among foreign subsidiaries, i.e. they are not more likely to introduce 'real' innovations if they cannot utilize knowledge transfer from an associated company.