Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
Empirical evidence suggests that technological spillovers also depend on the mode chosen by firms to serve the foreign market, since a closer location increases the degree of knowledge transmission. Therefore multinationals may want to locate subsidiaries near sources of technological innovation and domestic firms may take advantage of this closer location by absorbing more easily technological knowledge. Within this context we analyse the interaction between firms' international strategy and innovative performance by using a dynamic oligopoly model where knowledge flows increase with geographical proximity. Our results illustrate the relationship between firms' innovation and foreign expansion strategy when localized spillovers are considered.