What determines the localization of R&D in Sweden and abroad? Is R&D within Swedish MNEs moving away from Sweden and has Sweden become less attractive as an investment country for R&D?

Swedish multinational enterprises (MNEs) account for a significant part of the expenditure on research and development (R&D) in the business sector in Sweden (46 percent), and there has long been great interest in what determines the location of R&D. This is because R&D is expected to have positive effects on growth, create qualified jobs and increase the amount of new knowledge in a country. The purpose of this study is to analyze the factors that affect the location of R&D within MNEs in different countries (including Sweden).

It turns out that between 1999 and 2019, there was a clear reduction in the proportion of R&D carried out within Swedish MNEs in Sweden. Is this an indication that Sweden has become less attractive as an investment country for R&D? One conclusion in the report is that when different factors are considered that are expected to affect where the location of R&D takes place, this does not seem to be the case.

The empirical analysis in the report

The model estimated in the report is based on data on R&D expenditures in Swedish MNEs in different countries (including Sweden) between 1999 and 2019 that are explained with characteristics at the enterprise and country levels. Data come from a survey that the Swedish Agency for Growth Policy Analysis, together with Statistics Sweden, conducts every two years, where 20 Swedish MNEs (which have the largest R&D expenditures in Sweden) are asked about their R&D expenditures in the parents in Sweden and their affiliates in various countries abroad.