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German Companies Do Less Research Abroad

DIW Weekly Report 18 / 2010, S. 133-139

Heike Belitz

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Germany has profited from the internationalization of research and development (R&D) in multinational companies. While the international R&D balance sheet was balanced until 2001, foreign companies now invest more in R&D in Germany than German companies abroad. The share of R&D expenditures of German multinationals abroad is declining, whereas their global expenditures are increasing. This means the internationalization of R&D activities in Germany has slowed down. Strategic restructuring of multinational companies is the decisive factor for internationalizing R&D, not relocation. Against this background, current plans for tax relief for R&D will probably not lead to significant backshoring of foreign R&D activities to Germany.

JEL-Classification: F23;L2;O3
Keywords: Globalization, Research and development, Multinational companies, R&D tax credit
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