Multinationals and Industrial Competitiveness

Multinationals and Industrial Competitiveness

A New Agenda

New Horizons in International Business series

John H. Dunning and Rajneesh Narula

This book offers an important contribution to the contemporary debate on the role of multinational enterprises (MNEs) in economic development in an increasingly globalizing, knowledge-intensive and alliance-based world economy.

Chapter 7: Explaining Strategic R & D Alliances of European Firms

John H. Dunning and Rajneesh Narula

Subjects: business and management, international business, economics and finance, international business

Extract

7 Explaining strategic R&D alliances of European firms INTRODUCTION The Single European Market (SEM) initiative, through its various stages of economic cooperation until the establishment of the European Union, can arguably be said to be one of the most important socio-economic developments of the twentieth century. At the heart of much of this activity has been a belief that cooperation by institutions and firms across the various European countries represents a means by which the technological and economic gap between the USA and Europe after the Second World War might be narrowed. As Peterson (1991) has pointed out, although technological collaboration has constantly remained high on the agenda of European policy makers, pan-European R&D activities have only been developed systematically by policy makers since the 1980s. Several initiatives by the European Commission have been implemented over the past two decades in an attempt to bolster the competitiveness of European firms, particularly in high technology sectors. In addition to these Europe-specific changes, though, there have been several changes in the global economy which are generally described under the rubric of ‘globalization’. These developments have also had a significant impact on the growth of cross-border economic activity in general, as well as the increasing popularity of alliance activity in particular. In this chapter, we first seek to explain the reasons for the increasing importance of alliance activity, and the growth of a special class of alliances, that of strategic technology partnering (STP) or R&D alliances, paying special...

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