Working Paper No. 457

R&D and Foreign Sales in Multinationals: A Simultaneous Relationship?

Published: April 1996Pages: 29Keywords: R&D; Foreign Sales; Multinational EnterprisesJEL-codes: F23; O32

R&D and Foreign Sales in Multinationals: A Simultaneous Relationship? Gunnar Fors and Roger Svensson


This paper analyzes the simultaneous relationship between R&D and foreign sales in Swedish multinational enterprises in the manufacturing sector. We argue that this two-way relationship should especially apply to multinationals based in small open economies due to the firms' high dependence on foreign markets. The only previous study addressing this issue used data on multinationals originating from the United States, a country with a large domestic market, and it did not find evidence of the hypothesized simultaneous relationship. Our empirical results suggest a positive and significant effect in both directions.

Roger Svensson

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Interdisciplinary European Studies

The European Union in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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