Are large firms internationalizing the generation of technology? Some new evidence

Internationalization of technology remains a subject of considerable interest to analysts and policy makers in the 1990s. This paper is a modest attempt at providing some new empirical observations for debate and discussion on one dimension of the subject, namely, the nature and extent of the production of technology undertaken by large firms outside their home base. The evidence, based on the US patenting activities of the world's largest 539 firms (based in 13 countries and covering 16 product groups), shows that for an overwhelming majority of them technology production remains close to the home base. It also shows that firms devoting a large proportion of their resources to technology are amongst the least internationalized. When these firms do go abroad, there is no systematic relationship between their relative presence in a technical field and the relative strength of the host country. The analysis points to the dangers of generalizing on the basis of anecdotal evidence from a small sample of firms from a particular country or sector.