PEPP Special Seminar (October 19th 2026) – Dr. Trang Hoang
2026/09/29
2026/10/19 (Mon.)
Speaker: Dr. Trang Hoang
Chair: Prof. Vuong Nguyen
Time: 16:45~18:15
Format: Onsite 3B202
Title: Multinational firm innovation and affiliate sourcing decisions : Evidence from Japan.
Abstract: The paper studies the effect of R&D investment by multinational companies’ (MNC) parent firms and their affiliates on the affiliates’ decision to purchase intermediate inputs across different locations. We first develop a theoretical model that allows R&D to affect sourcing decisions through two channels: Hicks-neutral productivity and input prices. While the first channel implies that R&D in one location would affect imports from all locations equally, the second channel implies that R&D might have location-specific effects. Using data on a sample of Japanese multinationals and affiliates, we find that parent R&D has a robust positive effect on affiliate productivity. Furthermore, parent R&D and third-party affiliates’ R&D seem to increase the prices of inputs from Japan and third-party countries, suggesting higher quality of inputs from those locations. Our findings suggestion that through MNC activities, the geography of R&D has important implications for global trade flows.
