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It has long been recognized that R&D plays a key role in the global battle for technological leadership. However, due to intense competition and rivals' imitations, firms are not always able to reap rewards from their innovations. Mario Kafouros theoretically and empirically examines the impacts of innovation and scientific knowledge on the productivity performance of multinational corporations, and the conditions under which companies benefit from their technological discoveries. This book also investigates the extent to which the research efforts of other companies can contribute to a firm's productivity, and how multinationals build on external inventions, ideas and knowledge. The results confirm that not all firms can benefit from innovation, and indicate that whilst some companies can turn technological advances into a powerful competitive weapon, innovation for others is merely a defence mechanism. To provide a clearer understanding of the relationship between innovation and firm productivity performance, this book also investigates a number of additional issues including the costs of R&D, the association between the Internet and R&D efficiency, and the role of competition, internationalization, firm size and technological opportunities. This book will appeal to academics and researchers in the fields of international business, innovation and R&D, productivity and firm performance, the economics of technological change, and knowledge management. As the author examines the conditions under which firms benefit from innovation, managers, R&D directors, economists and government agents may also use the research findings in order to develop strategies and policies to maximize the impacts of innovation.