R&D,foreign ownership,and corporate groups: Evidence from Japanese firms

This study empirically examines whether the research and development (R&D) activities of foreign-owned firms in Japan differ notably from the R&D activities of domestically-owned firms based on a firm-level panel dataset. Our study carefully disentangles the significant differences in R&D investment behavior of subsidiaries due to three different reasons: having a foreign parent, corporate group affiliation, and the degree of relatedness between business units. The results reveal the following. First, firms that are majority-owned by another firm are less active in R&D than independent firms. Second, foreign ownership does not matter if the parent firm is from a G7 country, but R&D intensity is significantly and positively associated with foreign ownership if the parent firm is from a non-G7 country. Finally, for subsidiaries whose business is related to that of their parent firm, the R&D intensity is lower if the parent is a domestic firm, but higher if it is a foreign firm. These findings imply that globalization and the integration of firms may not only affect production patterns and global supply chains, but may also have an important impact on the level of domestic R&D activities.     

Overseas R&D, knowledge sourcing, and patenting: an empirical study of Japanese R&D investment in the US

This paper purports to study the contribution of R&D at home and abroad to the firm’s inventive activity, using a sample of 137 Japanese multinationals. The empirical analysis relates the number of inventions in Japan and that in the US, as measured by the number of patents issued by the USPTO, to the parent’s R&D, the US subsidiaries’ R&D, the presence of R&D in Europe, the firm’s experience in the US, entry mode, and industry dummies. In addition, to study the subsidiary’s role in sourcing local technological knowledge, we construct indices of local technological strength of the state in which the subsidiary is located. The results, most importantly, indicate that these indices positively contribute to inventions at home and in the US among Type R firms, whose R&D subsidiaries mainly aim to research, suggesting that knowledge sourcing is an important function of these subsidiaries and locational choice is important for this purpose. These results do not hold among Type S firms, whose R&D subsidiaries mainly aim to support local manufacturing and sales activities.     

R&D,patenting and innovative activities: A statistical exploration

Better understanding of, and policies towards, technical change, requires better measurement of technical change. No single measure is perfect. Taken together, statistics on R&D and on patenting activities give important clues about the rate and direction of innovative activities, and also show the dangers of too hasty interpretation based on one measure. They both show a neavy concentration of innovative activities in chemicals and engineering (electrical, electronic and non-electrical) sectors; relatively rapid growth of innovative activities in drugs, scientific instruments and food products, and slow growth in aerospace and electrical products, in the USA between 1963 and 1974. They both show relatively high levels of innovative activities in Germany, Sweden and Switzerland, and relatively rapid rates of increase in Japan and Sweden between 1967 and 1975. They also show the strong association in the chemicals and engineering industries between the levels of innovative activities and of export competitiveness.On the other hand, taken together they suggest that patent statistics underestimate innovative activities in large firms, and that R&D statistics do so in small firms. This casts doubt on widely held assumptions about diminishing rates of innovative activity in very large firms, and about the non-electrical machinery and fabricated metal products sectors as “traditional” and “non-innovative” industries. Four factors are put forward to explain differences in what is shown by the patent and by the R&D measures: First, competitive behaviour, with smaller firms making a relatively greater use of patents, and bigger firms of R&D activities; second, different degress of specialisation and formalisation of innovative activities in and around R&D departments; third, variation across sectors in the degree to which patents measure an increment of technical improvement; fourth, institutional factors in aerospace and other defence-related sectors, and in motor vehicles, where patenting is low and the proportion of routine testing in R&D comparatively high.     

Review of “Search Engines: Information Retrieval in Practice” by Croft,Metzler and Strohman

Despite the common public use of Web search engines, their internal design details mostly remain as a black art. The speculation is that there is a significant knowledge gap between what is published by academia and what is guarded behind the doors of large-scale search companies. “Search Engines: Information Retrieval in Practice” is one of the few books that make an attempt to cover issues involved in search engine design and is probably the most comprehensive book published so far on this topic. Unfortunately, the book fails to be a complete search engine guide as its content is dominated by the topics from information retrieval, text processing, and statistics. More precisely, the focus of the book is biased towards the “search” rather than the “engines” as, in most places, discussions on effectiveness dominate those on efficiency by a great margin. However, the book stands as a very solid IR book.