Drivers of R&D internationalisation - evidence from US firm investments in developing economies Online publication date: Fri, 29-Jun-2018
by Wei He; Tantatape Brahmasrene
Global Business and Economics Review (GBER), Vol. 20, No. 4, 2018
Abstract: In today's global competitive environment, multinational corporations (MNCs) continue to internationalise their research and development (R&D) activities by progressively locating their innovatory capacity in developing nations. Hence, a panel study is developed to examine the effects of multiple factors that motivate US R&D investment in developing nations based on the analysis of longitudinal data collected from a variety of governmental, academic and public sources. The empirical results indicate that MNCs locate their foreign R&D activities in developing nations in order to exploit the available resource endowment. Furthermore, targeting the emerging markets does not appear to be a strong motivator that drives MNCs' foreign R&D investment. Instead, developing nations that have advanced telecommunication infrastructure, low labour costs and technology specialisation capabilities attract more foreign R&D investment. The paper concludes by identifying a range of issues, managerial and policy implications.
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