Research and Development in Foreign Affiliates: Evidence from Japanese Firms

Rene Belderbos and T. Iwasa
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T. Iwasa: NIBOR

No 5, Research Memoranda from Maastricht : NIBOR, Netherlands Institute of Business Organization and Strategy Research

Abstract: This paper analyzes the determinants of the R&D intensity of 434 foreign affiliates, drawing on MITI''s benchmark survey of Japanese multinational firms in 1993. Acquired affiliates are responsible for more than half of overseas R&D expenditure and have significantly higher R&D intensities than wholly and majority owned greenfield affiliates. Non-majority owned joint ventures are R&D intensive in case the investing firm lacks substantial R&D capabilities in Japan. In contrast, R&D intensive Japanese parent firms prefer controlled modes of overseas R&D investment. Support is also found for an incremental growth pattern of foreign R&D operations as a function of cumulative learning. This learning is affiliate-specific rather than firm-wide and applies to greenfield affiliates but not to acquired affiliates. The results provide evidence that Japanese multinational firms, as ‘latecomers’ in the establishment of overseas R&D networks, have often made use of acquisitions and collaborative ventures to gain access to overseas technology and to establish overseas R&D capabilities at a faster pace.

Keywords: research and development (search for similar items in EconPapers)
Date: 1999
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