THE DETERMINANTS OF FOREIGN DIRECT INVESTMENT IN R&D: DIFFERENT INDUCEMENT EFFECTS OF PRIVATE AND PUBLIC R&D IN DEVELOPED AND DEVELOPING HOST COUNTRIES

Jun-Ki Park, Dong Joon Lee () and Keun Lee ()
Additional contact information
Jun-Ki Park: Research Fellow, Samsung Economic Research Institute, Seoul, South Korea
Dong Joon Lee: Research Fellow, Samsung Economic Research Institute, Seoul, South Korea

The Singapore Economic Review (SER), 2022, vol. 67, issue 03, 923-951

Abstract: In this paper, we identify the different determinants of the location of research and development (R&D) on foreign direct investment (FDI) in both developed and developing countries. In the case of host developed countries, we find that private R&D investment is positively associated with attracting R&D on FDI. In contrast, in the case of host developing countries, we find that private R&D investment is not significantly associated with attracting R&D FDI, but public R&D induces it. These findings imply that the objective of R&D FDI in developed economies is to advance multinational corporations’ (MNCs) technology further by targeting the local technology market. In contrast, the R&D FDI of MNCs in developing countries is attracted toward localities where the R&D infrastructure is better developed due to public R&D investment. MNCs in developing countries do not direct considerable attention to the R&D activities of the local private sector because their goal is to modify their own technology or products for the local product or export markets in the host countries. Therefore, although one obvious policy implication is the importance of conducting local R&D to attract foreign R&D, the more important factors are to stimulate private R&D further in the case of developed countries and to initiate public R&D first in the case of developing countries.

Keywords: R&D; FDI; determinant; developing countries; developed countries; public R&D (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0217590820450034
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:serxxx:v:67:y:2022:i:03:n:s0217590820450034

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0217590820450034

Access Statistics for this article

The Singapore Economic Review (SER) is currently edited by Euston Quah

More articles in The Singapore Economic Review (SER) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().