This Website uses cookies. By using this website you are agreeing to our use of cookies and to the terms and conditions listed in our data protection policy. Read more

Working Paper No. 832

Subsidizing Away Exports? A Note on R&D-policy towards Multinational Firms

Working Paper
Norbäck, Pehr-Johan (2010). “Subsidizing Away Exports? A Note on R&D-policy towards Multinational Firms”. IFN Working Paper No. 832. Stockholm: Research Institute of Industrial Economics (IFN).

Pehr-Johan Norbäck

In this paper, I investigate whether instead of strengthening home-based production, government R&D-subsidies can induce R&D-intensive firms to locate production abroad. Investigating firm-level data on Swedish MNEs, however, I find no evidence of such relocation. R&D subsidies rather tend to en courage export production at the expense of foreign production. The theory presented suggests that this is consistent with technology transfer costs, which outweigh trade costs for physical goods.

Pehr-Johan Norbäck

+46 (0)8 665 4522
+46 (0)73 574 3379