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This paper analyzes cross-country differences in innovation behavior of subsidiaries of German multinational enterprises. The analysis is based on data from Community Innovation Survey (CIS4) and covers 16 European countries. The authors find considerable differences in innovation input intensity and innovation output intensity between German subsidiaries located in different European countries. Multivariate analysis reveals that these differences are largely related to firm characteristics. A significant relationship between firm-level innovation and host country characteristics can only be found for innovation output.
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