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Country Relational Distance, Organizational Power and R&D Managers: Understanding Environmental Challenges for Foreign R&D in China

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  • Yifei Sun
  • Ke Wen

Abstract

This study examines the challenges of foreign research and development (R&D) in China, based on interviews with 32 senior R&D managers. It confirms the findings from previous research that many barriers still exist in China for foreign R&D, and such barriers include institutional environment, infrastructure and labour management. Among the three categories, issues related labour management, such as increasing labour cost and mobility, lack of experience and creativity and cultural differences among the research staff, prove to be most challenging for management, while China's institutions and infrastructure do not seem to pose big problems for foreign companies. This study also finds that responses from R&D managers are not consistent, and the differences could be largely explained by three types of factors: relational distance between the parent country and China, the strength and experience of foreign companies, and the manager's personal experience and closeness with China. Further research is needed to explore these issues due to the small sample size of this study.

Suggested Citation

  • Yifei Sun & Ke Wen, 2007. "Country Relational Distance, Organizational Power and R&D Managers: Understanding Environmental Challenges for Foreign R&D in China," Asia Pacific Business Review, Taylor & Francis Journals, vol. 13(3), pages 425-449, July.
    • Handle: RePEc:taf:apbizr:v:13:y:2007:i:3:p:425-449
    DOI: 10.1080/13602380701291982
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    References listed on IDEAS

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    1. Reddy, Prasada, 1997. "New trends in globalization of corporate R&D and implications for innovation capability in host countries: A survey from India," World Development, Elsevier, vol. 25(11), pages 1821-1837, November.
    2. Edwin Mansfield & David Teece & Anthony Romeo, 2008. "Overseas Research and Development by US-Based Firms," World Scientific Book Chapters,in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 12, pages 297-306 World Scientific Publishing Co. Pte. Ltd..
    3. Vachani, Sushil, 2005. "Problems of foreign subsidiaries of SMEs compared with large companies," International Business Review, Elsevier, vol. 14(4), pages 415-439, August.
    4. Yingfeng Xu, 2001. "Can Tariff-Jumping Foreign Investment Be Beneficial?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 26(1), pages 161-177, June.
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    Cited by:

    1. Amelia U. Santos-Paulino & Mariagrazia Squicciarini & Peilei Fan, 2008. "R&D (Re)location: A Bird's Eye (Re)view," WIDER Working Paper Series RP2008-100, World Institute for Development Economic Research (UNU-WIDER).
    2. Yunlong Duan & Hanxiao Liu & Zhiqing Deng & Peng Tao, 2021. "The Impact of Cross-Border R&D Sourcing on the Innovation Quality of MNCs, from the Perspective of Business Model Innovation," Sustainability, MDPI, vol. 13(8), pages 1-22, April.
    3. Farndale, Elaine & Beamond, Maria & Corbett-Etchevers, Isabelle & Xu, Shiyong, 2022. "Accessing host country national talent in emerging economies: A resource perspective review and future research agenda," Journal of World Business, Elsevier, vol. 57(1).

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