The Globalization of R&D and Human Capital Flows

Britta Glennon, Management, The Wharton School

Abstract: My research studies innovation and technological change, with a special focus on the changing structure of the R&D activities of multinational firms. Multinational firms account for the majority of innovation investment worldwide. However, while innovation within these firms historically has been spatially concentrated in the home country, that concentration has changed dramatically in the past 20 years. U.S. multinational foreign R&D expenditure has grown sevenfold on both the intensive and extensive margins since the 1990s. Despite this increase, the geographic spread of multinational R&D still lags far behind multinational production. This is at least in part due to the importance of human capital to their operations and the directly associated challenges of transferring tacit knowledge across geographic distance.