Dr. Tantatape Brahmasrene and Dr. Wei He:
‘Internationalisation of R&D Investments in Developing Economies’, Global Business and Economics Review, accepted March 2, 2017
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 U.S. R&D investments 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 investments. Instead, developing nations that have advanced telecommunication infrastructure, low labor costs and technology specialization capabilities attract more foreign R&D investments. The paper concludes by identifying a range of issues, managerial and policy implications.