ABSTRACT
This chapter develops a methodology that allows us to estimate the international distribution of firms' inventive activities, and then applies it in the estimation of R&D contributions to a firm's market valuation and productivity. The growing importance of the globalisation of R&D activities is evident from a large number of case studies, statistics, and analyses, both at the national and corporate level. Yet, it is still difficult to describe the phenomenon statistically, because systematic data which map the internationalization of R&D are still rare. In our multivariate analysis, we employ a simple accounting approach which relates total R&D to the number of inventors in different locations. Estimating linear and nonlinear versions of this R&D expenditure equation provides us with highly plausible results inventor counts have strong explanatory power. Finally, we employ the inventor counts to estimate the impact of domestic and foreign-located invention activities on the market value and output of the firm.
