Dissertation: International R&D units improve the performance of firms

Uutisen oletuskuva
People and policymakers in many developed countries are concerned that domestic firms appear to be increasingly locating their research and development activities abroad and may at the same time erode the national scientific capabilities. However, according to Jaana Rahko’s doctoral dissertation this worry seems to be exaggerated. Her dissertation on the field of Economics presents research results showing that international research and development (R&D) activities increase the patenting and productivity of firms. She will defend her thesis at the University of Vaasa.
Väitöstutkimuksen mukaan yritysten oman tutkimustoiminnan kansainvälistämisen hyödyt näkyvät patenttien määrässä, niiden teknisessä monialaisuudessa ja t&k-toiminnan tuotoissa.

In her dissertation, Rahko examined European manufacturing firms and found out that research intensive firms benefit from having R&D facilities abroad.

“The firm-level benefits of international R&D can be seen in the number of patents, the technological diversity of patents as well as in the productivity of R&D investments”, Rahko describes.

The observed gains are associated with R&D investments targeted at more technologically advanced countries, whereas overseas R&D in countries that technologically lag behind the firm’s home country do not bring significant gains. According to Rahko these investments may be targeted at opening new markets for the firm’s products. Therefore, the gains of international R&D activities are not necessarily limited to improvements in firm innovativeness.

“It appears that the concerns regarding the national research capabilities do not have scientific foundation, because when firms learn from foreign competitors, universities and research institutes it can also support their performance and growth in the home country”, says Rahko. Therefore, public sector actions that support the exporting and internationalization of domestic firms could also consider international corporate learning as a part of their target.

Productive patent inventor from another field is an asset

In her article-based dissertation, Rahko has also studied the mobility of patent inventors. She finds that European firms’ patenting increases after inventor mobility, but only if they hire inventors with high prior productivity or who bring different kinds of technological expertise to the firm.

Also the outbound mobility of inventors had an effect on firm’s future patenting. Firm’s patenting decreased when the firm lost inventors who had high prior productivity or had worked in the firm’s core field of technology. Loosing inventors who had been less productive or worked in non-core technological field did not harm future patenting.

Rahko’s study reveals that labor mobility has an important role in facilitating knowledge spillovers between firms.

“The spreading of new innovations in the society is of key importance for economic growth. Therefore, it is also of political importance to facilitate the mobility of knowledge carriers”, says Rahko. For example in Silicon Valley, the growth and success of the region has partly relied on frequent job hopping, which  has been enabled by the Californian legislation that bans non-compete clauses that restrict the free mobility of workers across firms.

Further information

Jaana Rahko, tel +358 50 324 4973, e-mail: jaana.rahko(at)uwasa.fi

Rahko, Jaana (2016). Essays on R&D, knowledge spillovers and firm performance. Acta Wasaensia 357.

Publication (Pdf)


Public Defense

The public examination of M.Sc. Jaana Rahko’s doctoral dissertation “Essays on R&D, knowledge spillovers and firm performance” will be held on Friday 14 October at 12 o´clock in auditorium Kurtén (C203, Tervahovi). The field of dissertation is economics.

Professor Otto Toivanen (Katholieke Universiteit Leuven, Belgium) will act as opponent and Professor Hannu Piekkola as custos. The examination will be held in Finnish.


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