Publication

This paper explores the relationship between domestic research and development (R&D) and the inflow of foreign capital through foreign direct investment and foreign ownership. The paper empirically tests the idea that firms invest in a foreign country in order to more easily absorb the knowledge and technology of foreign firms using a unique firm-level data set covering foreign ownership and R&D for all Norwegian firms over the period from 1990 to 1996. The study finds no clear evidence supporting the existence of such a motive behind foreign ownership.