This paper examines the role of spillovers and externalities in influencing the recent siting of foreign-owned research and development activities in European regions. In accordance with the literature on knowledge creation in multinational corporations, the location of foreign-owned research tends to agglomerate depending upon the potential for the following different sources of spillovers and externalities: (1) intra-industry spillovers or specialization externalities associated with the presence of a wideranging collection of firms active in the same sector; (2) inter-industry spillovers or diversity externalities associated with the co-presence of firms working in different fields; and (3) science-technology spillovers and externalities stemming from the presence of a munificent scientific and educational infrastructure. Additionally, benefits from spillovers decline with distance, but this holds especially for intra- and inter-industry spillovers.
All Science Journal Classification (ASJC) codes
- Environmental Science(all)
- Social Sciences(all)
- European regions
- Multinational corporations
- Research and development activities