The emergence of corporate integrated innovation systems across regions: The case of the chemical and pharmaceutical industry in Germany, the UK and Belgium

This paper examines the subnational, regional, aspects of the multinational corporations' (MNCs) increasingly global innovative networks in the chemical and pharmaceutical industry. Using patents granted in the US to the largest industrial firms, attention is restricted to the main European MNCs and their research activities established in German, British and Belgian regions. The position of national groups of firms in a geographical hierarchy has been argued to affect the technological strategy and specialisation of those groups in foreign countries [Res. Policy 28 (1999) 119.]. This paper extends the argument at the regional level, allowing for a hierarchy of regional host centres and investigating where and how MNCs of different nationality organise their networks for innovation in those regions. The main proposal is that the technological specialisation of foreign-owned affiliates in each region will become more closely related to the regional indigenous specialisation pattern the higher the position of their parent firms' country of origin in the national hierarchy is, and the lower the position of the regional host location in the regional hierarchy is. Conversely, when MNCs originating from a lower-order country locate research facilities in a higher-order country and regional centre, their affiliates are expected to show a tendency to replicate their domestic established lines of specialisation. This paper highlights the potential impact of the dynamic interactions between MNCs and their home and host locations on the technological performance of both the firm and its local environment.