Ruth Rama

Empirical study on sources of innovation in international food and beverage industry

Based on a sample of 4,572 foreign patents, this article analyzes the sectoral and geographic sources of innovation in the international Food and Beverage industry at the four-digit level. Upstream industries are important contributors of innovation, especially for commodity-type industries. Technological intensity varies across the OECD (Organization for Economic Co-operation and Development) area. Association of inventive national industries with large corporate size and relevant overseas production is not generalized. While comparative technological advantage is not likely to challenge the international oligopoly in the short run, new entrants based on technical knowledge could contest specific markets of giant firms. Rivalry may increase in the new framework of the European Union.

Innovation spells in the multinational agri-food sector

Abstract This paper examines the innovative history of a number of multinational agri-food companies using a database for utility patents and design patents. The first hypothesis to be tested is whether firms that innovate, usually do it persistently. We analyse a sample of 16,698 patents granted in the US over the period 1977–1994 to 103 F&B firms selected from the world’s largest food and beverage multinationals (FBMs). The main conclusion that stems from these series is that only a small number of spells last for more than 4 yr. That is, only 6% of all utility patenting spells are ongoing after 4 yr, and only 1.6% of all design patenting spells are ongoing after 4 yr. Nevertheless, it is significant that there are 22 utility patents spells of the longest duration (18 yr). This frequency is only comparable to 3 yr long spells in utility patents and it is completely different from the design patents (there is only one 18 yr spell). However, this myriad of short-term projects coexist with long-run innovation. There is a small nucleus of persistent patentors who contribute around 80% of the total number of patents granted to the multinational agri-food sector. Persistent patentors are also heavy patentors since length of spells and average number of patents per year are statistically associated. Length of innovative spells is not associated, by contrast, with size of the company or specific agri-food subsector. Companies remaining innovative in the technical field tend also to remain innovative in design for long periods of time.

Innovation and Profitability of Global Food Firms. Testing for Differences in the Influence of the Home Base

In previous research it has been assumed that the performance of enterprises in global markets, especially companies in high-tech sectors, is often associated with the amount of effort devoted to innovation by the home country. In this article I test empirically such assumptions in a low-tech sector, the food and beverage processing industry, with evidence provided by a sample of 4572 foreign patents granted to nationals from major OECD countries over 1969–88 and data on 96 major multinationals. In contrast with most previous research, this study investigates within-industry differences in the impact of the home base. My findings show that the theory is applicable to low-tech sectors. However, the impact of the home country is not homogeneous within industries, and depends on size and international experience of firms. Smaller multinational enterprises and newcomers achieving high profitability tend to be based in countries where the food and beverage national industry is technologically intensive, whereas geography is less crucial to explaining the international performance of very large companies.

The Spatial Patterns of Networks, Hierarchies and Subsidiaries

This article reviews evidence and arguments linking the networking behaviour of firms with geographic distance, before examining the spatial relationships of electronics firms in the three major electronics centres in Spain. The focus is on the spatial pattern and extent of different types of inter-firm relations. Based on the analysis of 184 surveyed establishments, displaying different ownership and organization characteristics, the results show that while regional linkages are important, significant extra-regional linkages are also maintained by firms in regional clusters. The spatial extent of linkages depends on the mode of relations; arms length, network and hierarchy relations show different spatial patterns, as do different types of cooperation. The importance of extra-regional linkages also varies with firm- and plant-specific characteristics. Extra-regional linkages are more common among larger and more R&D-intensive firms, firms with greater presence in the rest of the country and firms with more experience of cooperation and more stable relationships.

Home or next door? Patenting by European food and beverage multinationals

We study the location of the inventive activity of 59 major European food and beverage multinationals and their 8432 subsidiaries worldwide, by analysing the geographical distribution of the inventors listed in the European Patent Office (EPO) applications, US Patent and Trademark Office (USPTO) patents and triadic, international and Patent Cooperation Treaty (PCT) patent families of the companies filed between 1978 and the early 2000s. The sampled companies tend to locate their R&D activities in the home country. EU-based companies, more specifically, deploy an intra-regional strategy in EU countries, especially with regard to the inventions most closely related to their core businesses (food), for which, however, they do not display a home-country preference. Inventions related to non-core business tend to be produced in extra-regional locations.

Local cooperation for innovation: food and beverage multinationals in a peripheral European country

We performed econometric analysis to identify some of the main features of food and beverage foreign subsidiaries engaged in local R%D cooperation. In Spain, their main contributions to local networks of innovators seem to be financial and commercial rather than technological. Foreign subsidiaries that display high R%D intensity, and have a large number of R%D employees or a large share of new products in turnover, are not necessarily engaged in local R%D networks. Foreign subsidiaries facing fewer obstacles to innovation than the average food and beverage firm seem better able to build those networks. The most important features of food and beverage multinationals that cooperate for innovation with local partners are those of economic strength and dominant market position. Foreign subsidiaries appear to combine internal and external information in order to innovate. Their size or their export activities are not significantly associated with a possible involvement in local cooperation for innovation.

Persistence of innovative activities in times of crisis: the case of the Basque Country

ABSTRACT By drawing on a large sample of Spanish manufacturing and service sector firms, the changes in firms’ innovation expenditures that have taken place since the onset of the 2008 economic crisis are analysed, as is the relationship between such changes and the location of the company. Special focus is placed on firms in the Basque Country. Compared to other Spanish regions, the Basque Country differs in terms of its fiscal status, its earlier experience of crises, its innovation performance and its greater focus on innovation-related policies. Our results show that the impact of the crisis on firms’ innovation expenditures in the Basque Country has indeed differed from that in comparable Spanish regions. Even after controlling for sectoral differences and for detailed characteristics at the firm level, firms with R&D employment in the Basque Country showed a significantly lower probability of abandoning innovation activities and even a somewhat higher probability of increasing their innovation efforts. This regional effect is especially significant for small and medium-sized enterprises.

Comparing Outsourcing Patterns in Domestic and FDI Manufacturing Plants: Empirical Evidence from Spain

To fully understand the local linkages of Foreign Direct Investment (FDI) plants, we argue it would be useful to analyze the outsourcing patterns of such plants in comparison to domestic plants. Consequently, we examined 1031 industrial plants, both domestic and foreign, located in Spain. The FDI plants show patterns similar to those of domestic plants with regard to the level of outsourcing, the incidence of outsourced production on the companies’ total sales and the economic content of outsourcing relationships. Further, our results show that levels of embeddedness in the local and regional economy of FDI plants are not significantly different from domestic plants. However, FDI plants are highly concentrated spatially in the largest industrial agglomerations. For such plants, Barcelona not only seems a preferred site for location but also for contracting manufacturing tasks.

Economic crisis and company R&D in Spain: do regional and policy factors matter?

ABSTRACT The economic crisis which began in 2008 has had a far-reaching impact, including effects on the innovation behaviour of firms. Many companies have reduced their innovation-related activities, although some firms have been more resilient than others. Using a representative microdata panel of Spanish firms, we study the probability of companies abandoning in-house R&D during the crisis and its relationship to regional and policy factors. We find significant regional heterogeneity related to regional economic size and the type of the regional innovation system; regional government R&D support only reduces R&D abandonment rates in regions where a strong system of knowledge exploitation is in place.

An exploratory analysis of networking, R&D and innovativeness in the Spanish electronics sector

Using survey data of electronics firms in the three major electronics clusters in Spain, we examine whether those engaged in networking tend to be more innovative and whether local and extra-regional networking have different effects upon innovativeness. We find a positive relation between different types of network relations and innovativeness. In particular, our findings suggest that subcontracting relationships are a way of exchanging technological know-how and are a potentially important element in the innovation process. With regard to the spatial extent of network relations, we find only weak results for differences between local and extra-regional networking.