Scandinavian Working Papers in Economics

Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

No 241: Firm Strategy, Location and MNE-networks

Hans Lööf () and Borje Johansson ()
Additional contact information
Hans Lööf: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Borje Johansson: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden

Abstract: This paper asks three explicit questions, where the first one concerns the impact of a firm’s choice of innovation strategy and knowledge resources. The study aims at confirming that firms with a strategy with R&D persistency have a markedly higher productivity, profitability and wage level than other firms. The second question is focused on the location of firms, with a distinction between firms dwelling in a metropolitan region and other firms. The hypothesis is that a metropolitan knowledge milieu may augment the performance of firms. The third question concerns knowledge exchange in regional and global networks that pertain to multinational affiliates. Applying Swedish data on individual firms and their location, the paper shows that firm performance is significantly higher when the three factors R&D persistency, metropolitan location and affiliation to a multinational group are combined.

Keywords: R&D; knowledge; productivity; profitability; regional milieu

JEL-codes: F23; L25; O31; O33; R11

26 pages, September 28, 2010

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