Template-type: ReDIF-Paper 1.0
Author-Name: Narula, Rajneesh
Author-Email: r.narula@henley.reading.ac.uk
Author-Workplace-Name: John H. Dunning Centre for International Business,
	 Henley Business School, University of Reading
Author-Name: Guimon, Jose
Author-Email: jose.guimon@uam.es
Author-Workplace-Name: Department of Economic Structure and Development Economics,
	 Faculty of Economics, Universidad Autónoma de Madrid
Title: The R&D activity of multinational enterprises in peripheral economies: evidence 
	 from the EU new member states 
Abstract: This paper explores the impact of MNEs on innovation systems and the 
	 policy options available for peripheral economies to attract and embed 
	 the R&D activities of MNEs. After developing the conceptual and policy 
	 framework, we discuss the case of the new member states from Central and 
	 Eastern Europe that joined the EU between 2004 and 2007. We analyse the 
	 evolution of the R&D activity of MNE subsidiaries since the 1980s, 
	 contrasting the new member states with the core and Mediterranean 
	 countries of the EU. This analysis is useful to illustrate some common 
	 challenges for peripheral economies, including the difficulty of 
	 building linkages with MNEs in high value adding activities; the risk of 
	 crowding-out of domestic R&D following cross-border acquisitions; the 
	 risk of external dependency; and the limitations of protectionist 
	 policies. We recommend that governments of peripheral economies focus 
	 their efforts on fostering a demand-oriented upgrading of technological 
	 capabilities and on stimulating domestic linkages and clusters around 
	 MNEs, rather than seeking to attract supply-driven R&D. 
Classification-JEL: O32, F23, P33
Keywords: European Union, FDI, investment, innovation systems, innovation policies,
	 linkages, MNE, multinational enterprises, new member states,
	 peripheral economies, R&D
Series: UNU-MERIT Working Papers
Creation-Date: 2010
Number: 048
File-URL: http://www.merit.unu.edu/publications/wppdf/2010/wp2010-048.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2010048