Locational criteria of activities related to innovation: an econometric study of industry-level data for OECD countries

Innovation-related activities have undergone steady internationalization in recent years. Host economies now need to offer a favourable environment to companies in which to develop their innovationrelated activities. This paper presents an econometric study of the locational criteria of innovation-related activities. The results show the importance of market size, agglomeration effects, and, to a lesser extent, the quality of public governance, to the location of international activities in innovation-related activities. The overall degree of a country's openness to foreign direct investment also appears to be a significant locational determinant. The results give insights on the locational strategies of transnational corporations in various industries and across differing types of economy.
1. Introduction This study sets out new evidence on the international locational criteria of innovation-related activities, derived econometrically using the OECD databases on foreign presence in the host economy at [...]