Who captures value from science-based innovation? The distribution of benefits from GMR in the hard disk drive industry

•Basic research must be commercialized by domestic firms for countries to benefit.•Commercialization depends on the absorptive capacity of domestic firms.•The gross profits of domestic firms mostly stay in the home country, supporting well-paying jobs in R&D, product design, administration, sales and marketing, as well as rewarding investors.•Policies that enhance absorptive capacity help countries benefit from basic research.