Multinationalization and the scope of innovation

This research sheds light on how multinationalization affects basic research by firms and how their product scope influences this relationship. Using a matched firm-patent data set, we apply the generality measure of patent citation to investigate the effect of multinationalization on the extent to which patents registered by firms are applicable to diverse technology fields. We find that multinationalization is generally associated with less fundamental patents. However, engaging in more international activities while operating a more diversified portfolio of products is conducive to patents that open the way for follow-up research and inventions. These findings are robust to various specifications and sampling tests.