Unbundling R&D and manufacturing: Postindustrial myth or economic reality?

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Abstract

Understanding determinants of business location decisions is important from the point of view of economic policy. While the determinants of manufacturing and R&D location have been extensively covered in the literature, in this article we examine a largely neglected question: Under what conditions do manufacturing and R&D have to be physically colocated, that is, when is unbundling the two impossible? In a sample of 241 Finnish industrial firms, we find that unbundling R&D and manufacturing is possible for some companies but indeed a postindustrial myth of sorts for many others. The need for colocation correlates with knowledge intensity of activities: product complexity, process complexity, and industry rate of change, but interestingly enough, not with the size of the firm's R&D budget. © 2009 by The Policy Studies Organization. All rights reserved.

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Ketokivi, M., & Ali-Yrkkö, J. (2009). Unbundling R&D and manufacturing: Postindustrial myth or economic reality? Review of Policy Research, 26(1–2), 35–54. https://doi.org/10.1111/j.1541-1338.2008.00368.x

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