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U.S. R&D internationalization in less‐developed countries: Determinants and insights from Brazil, China, and India

Tulio Chiarini, Thiago Caliari (), Pablo Felipe Bittencourt and Marcia Rapini ()

Review of Development Economics, 2020, vol. 24, issue 1, 288-315

Abstract: The growing U.S. R&D internationalization has historically been concentrated in developed countries. However, in the past few decades, the internationalization has moved toward less‐developed countries (LDCs), particularly Brazil, China, and India. What location factors are making some LDCs more “inviting” for U.S. R&D offshore? To answer this first question, we constructed a panel data using secondary data from the U.S. Bureau of Economic Analysis regarding the R&D investment made by the majority‐owned foreign affiliates of U.S. parent companies in 71 countries. We then applied a Heckman two‐step correction for selection bias test. The results highlight some important differences between developed countries’ and LDCs’ attractiveness. Based on these initial results, we conducted a detailed analysis of the determinants of U.S. R&D investments in Brazil, China, and India, which revealed that China’s determinants mostly match those found in more developed countries.

Date: 2020
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