Drivers of R%D internationalisation - evidence from US firm investments in developing economies

Wei He and Tantatape Brahmasrene

Global Business and Economics Review, 2018, vol. 20, issue 4, 425-452

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. (search for similar items in EconPapers)
Date: 2018
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