Where to Set up R&D Lab Abroad? Positive outcomes and direction of cross- national distance

This study investigates the influence of cross-national economic and intellectual property rights (IPR) distance on the decision of setting up different types of research and development (R&D) laboratories abroad. Drawing on recent developments of research on cross-border distance, we suggest that cross-national economic distance positively influences the decision of setting up adaptive R&D laboratories as the knowledge-exploiting mission of this type of laboratory enables firms to profit from the opportunities that different cross- national economic conditions offer. In addition, we propose that the decision of setting up innovative R&D laboratories critically depends on the direction of cross-national IPR distance. Firms are more (less) likely to set up innovative R&D laboratories in host countries with IPR regimes stronger (weaker) than in their home country as the knowledge-exploring mission of this type of laboratory is extremely sensitive to host country relative appropriability conditions. Innovati...