The global location of R&D centres by MNCs is a rather new phenomenon; especially when it comes to establishing R&D centres in developing countries. The existing and rather limited literature on globalization of innovation provides four possible explanations of why multinationals locate R&D departments in developing countries: reduce research costs, access large markets, tap into a large pool of qualified human resources or benefit from knowledge spillovers available in the local/regional system of innovation. The empirical research presented in this paper reveals that none of these arguments can fully explain the increasing location of R&D departments in China. The in-depth study of MNCs R&D centres in Beijing and Shanghai, China, reveals that specific aspects of market, technological and political uncertainty provide more adequate to explain the increasing presence of R&D labs from MNCs in developing countries such as China and thus calls for an integration in the regional innovation systems framework.
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Paper provided by CIRCLE (Centre for Innovation, Research and Competence in the Learning Economy), Lund University in its series CIRCLE Electronic Working Paper Series with number
2008-18.
Find related papers by JEL classification: O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes O34 - Economic Development, Technological Change, and Growth - - Technological Change - - - Intellectual Property Rights O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy N5 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence R58 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Regional Development Policy
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