Working Paper Series
Gunnar Fors and Roger Svensson
R&D and Foreign Sales in Multinationals: A Simultaneous Relationship?
Abstract: This paper analyzes the simultaneous relationship between
R&D and foreign sales in Swedish multinational enterprises in the
manufacturing sector. We argue that this two-way relationship should
especially apply to multinationals based in small open economies due to the
firms' high dependence on foreign markets. The only previous study
addressing this issue used data on multinationals originating from the
United States, a country with a large domestic market, and it did not find
evidence of the hypothesized simultaneous relationship. Our empirical
results suggest a positive and significant effect in both directions.
Keywords: R&D; Foreign Sales; Multinational Enterprises; (follow links to similar papers)
JEL-Codes: F23; O32; (follow links to similar papers)
29 pages, April 1996
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