Title: Drivers of R&D internationalisation - evidence from US firm investments in developing economies

Authors: Wei He; Tantatape Brahmasrene

Addresses: College of Business, Purdue University Northwest, 1401 S. US 421, Westville, Indiana 46391, USA ' College of Business, Purdue University Northwest, 1401 S. US 421, Westville, Indiana 46391, USA

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.

Keywords: multinational corporations; MNCs; internationalisation; developing economies; R&D investment; telecommunication; labour costs; technology specialisation; market factor; resource factor.

DOI: 10.1504/GBER.2018.092763

Global Business and Economics Review, 2018 Vol.20 No.4, pp.425 - 452

Received: 09 Dec 2016
Accepted: 02 Mar 2017
Published online: 29 Jun 2018 *

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