The Impact of Innovation within the Multinational Firm

When firms operate production plants in multiple countries, technological improvements developed in one country may be shared with firm sites abroad for efficiency gains. Eduardo Morales , together with Kamran Bilir, has developed a dynamic model that allows for such intrafirm transfer, and has applied it to measure the impact of innovation on performance for a panel of US multinationals. The researchers' estimates indicate that US parent R&D raises performance significantly at firm locations abroad, and also complements R&D by affiliates. Parent R&D is a substantially more important determinant of firm performance than affiliate R&D. They identify these R&D effects using variation in location-specific innovation policies.

Eduardo Morales's main research interests are in international trade, industrial organisation and applied econometrics. During his stay in Munich, on June 6, he will give a talk at the Munich International Economics Seminar of the LMU Department of Economics entitled: "The Impact of Innovation in the Multinational Firm".

Eduardo Morales is Assistant Professor of Economics and International Affairs at Princeton University, and Faculty Research Fellow at the National Bureau of Economic Research: International Trade and Investment. He received a BA in Law from Universidad Carlos III de Madrid, a BA in Economics from Universidad Carlos III de Madrid and a PhD in Economics from Harvard University.