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Multinational Enterprises in Regional Innovation Processes

Empirical Insights into Intangible Assets, Open Innovation and Firm Embeddedness in Regional Innovation Systems in Europe

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Jan-Philipp Kramer

This book is positioned at the interface of research in economic geography and strategic management, combining topics like intangible assets (IAs), Open Innovation strategies of multinational enterprises (MNEs), and Regional Innovation Systems (RIS). A micro-approach to analyzing the innovation behavior of nine MNEs in two advanced European economies, Germany and the UK, was applied, which has revealed key channels through which IAs are enhanced in the innovation processes of multinationals and has described their spatial roots and impact. Moreover, the study presents a novel matrix of the regional embeddedness of MNEs and systematically classifies the case study firms. Finally, it shows that geographical proximity to RIS is important for Open Innovation and enables MNEs to strengthen their absorptive capacity.

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1 INTRODUCTION 1

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.1 Research Context In an increasingly globalized world, knowledge creation and, even more so, in- novation have become key ingredients for sustainable economic growth and a high level of employment, particularly in developed economies but also in emerging markets and developing countries. Over the past decades, the compar- ative advantage of the advanced economies with high labor costs has conti- nuously shifted towards knowledge-based activities and innovation. At the same time, firms, especially globally operating multinational enterprises (MNEs), am- plify their global research and development (R&D) activities in an attempt to access creative talent around the world, while policymakers on supra-national (e.g., the European Commission), national, and regional levels (e.g., the German federal states) increase their efforts to promote innovative capacities and human capital within their territories. Thus, although firms and regions indeed compete globally, and global access to factor inputs such as raw materials, financial resources, and scientific knowledge has significantly increased over the last few decades, strong empiri- cal evidence shows that location continues to play a significant role in competi- tive advantage (SCOTT, 1998; ENRIGHT, 2000; REVILLA DIEZ, 2002; SCHIELE, 2003; SCHIELE, 2008). As Harvard Business School Professor Mi- chael PORTER (2008, p. 252 f.) notes, “economic geography in an era of glob- al competition […] involves a paradox. In an economy with rapid transportation and communication and accessible global markets, location remains fundamen- tal to competition”. Furthermore, he argues that ”the enduring competitive ad- vantages in a global economy are often heavily local, arising from concentra-...

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