IDEAS home Printed from https://ideas.repec.org/a/bla/jomstd/v47y2010is2p1534-1560.html
   My bibliography  Save this article

Factors Determining Offshore Location Choice for R&D Projects: A Comparative Study of Developed and Emerging Regions

Author

Listed:
  • Mehmet Demirbag
  • Keith W. Glaister

Abstract

This paper examines empirically the determinants of offshore location choice between country clusters. Based on a dataset of 1722 R&D projects by MNEs located in developed and emerging countries, we examine the impact of home and host country, industry, and firm level variables on choice of location. We draw on the extended OLI paradigm to develop our hypotheses. Using the EU15 as a base group, a multinomial logit model is estimated between the regions of USA&Canada, Eastern Europe&Russia, emerging countries of Asia, and India&China. At the regional level, findings show that the R&D wage difference and knowledge infrastructure difference between home and host countries, the science and engineering talent pool size, and political risk level of host countries are important determining factors. At the firm level, experience of overseas R&D projects and prior experience of research in the host country are found to be important location determinants. A distinguishing feature of the paper is that we examine regions in relation to a base region, and then further examine the impact of a marginal change in independent variables on the likelihood of the choice of a region for new offshore R&D projects. Copyright (c) 2010 The Authors. Journal of Management Studies (c) 2010 Blackwell Publishing Ltd and Society for the Advancement of Management Studies.

Suggested Citation

  • Mehmet Demirbag & Keith W. Glaister, 2010. "Factors Determining Offshore Location Choice for R&D Projects: A Comparative Study of Developed and Emerging Regions," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1534-1560, December.
  • Handle: RePEc:bla:jomstd:v:47:y:2010:i:s2:p:1534-1560
    as

    Download full text from publisher

    File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-6486.2010.00948.x
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bonaglia, Federico & Goldstein, Andrea & Mathews, John A., 2007. "Accelerated internationalization by emerging markets' multinationals: The case of the white goods sector," Journal of World Business, Elsevier, vol. 42(4), pages 369-383, December.
    2. Arie Y Lewin & Silvia Massini & Carine Peeters, 2009. "Why are companies offshoring innovation? The emerging global race for talent," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(8), pages 1406-1406, October.
    3. Ahmed, Zafar U. & Mohamad, Osman & Tan, Brian & Johnson, James P., 2002. "International risk perceptions and mode of entry: a case study of Malaysian multinational firms," Journal of Business Research, Elsevier, vol. 55(10), pages 805-813, October.
    4. Ricardo G Flores & Ruth V Aguilera, 2007. "Globalization and location choice: an analysis of US multinational firms in 1980 and 2000," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(7), pages 1187-1210, December.
    5. Peter J Buckley & Pervez N Ghauri, 2004. "Globalisation, economic geography and the strategy of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(2), pages 81-98, March.
    6. Uday M. Apte & Richard O. Mason, 1995. "Global Disaggregation of Information-Intensive Services," Management Science, INFORMS, vol. 41(7), pages 1250-1262, July.
    7. Kuemmerle, Walter, 1999. "Foreign direct investment in industrial research in the pharmaceutical and electronics industries--results from a survey of multinational firms," Research Policy, Elsevier, vol. 28(2-3), pages 179-193, March.
    8. Arie Lewin & Silvia Massini & Carine Peeters, 2008. "Why are companies offshoring innovation ?the emerging global race for talent," Working Papers CEB 08-009, ULB -- Universite Libre de Bruxelles.
    9. Ravi Ramamurti, 2001. "The Obsolescing ‘Bargaining Model’? MNC-Host Developing Country Relations Revisited," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(1), pages 23-39, March.
    10. Kedia, Ben L. & Mukherjee, Debmalya, 2009. "Understanding offshoring: A research framework based on disintegration, location and externalization advantages," Journal of World Business, Elsevier, vol. 44(3), pages 250-261, July.
    11. Christoph Grimpe & Ulrich Kaiser, 2010. "Balancing Internal and External Knowledge Acquisition: The Gains and Pains from R&D Outsourcing," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1483-1509, December.
    12. Hicks, Diana & Hegde, Deepak, 2005. "Highly innovative small firms in the markets for technology," Research Policy, Elsevier, vol. 34(5), pages 703-716, June.
    13. Susan M. Mudambi & Stephen Tallman, 2010. "Make, Buy or Ally? Theoretical Perspectives on Knowledge Process Outsourcing through Alliances," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1434-1456, December.
    14. Alan M Rugman & Alain Verbeke, 2004. "A perspective on regional and global strategies of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(1), pages 3-18, January.
    15. Stefanie Ann Lenway & Thomas P Murtha, 1994. "The State as Strategist in International Business Research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(3), pages 513-535, September.
    16. John H Dunning & Masataka Fujita & Nevena Yakova, 2007. "Some macro-data on the regionalisation/globalisation debate: a comment on the Rugman/Verbeke analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(1), pages 177-199, January.
    17. Bas, Christian Le & Sierra, Christophe, 2002. "'Location versus home country advantages' in R&D activities: some further results on multinationals' locational strategies," Research Policy, Elsevier, vol. 31(4), pages 589-609, May.
    18. Jonathan P Doh & Kraiwinee Bunyaratavej & Eugene D Hahn, 2009. "Separable but not equal: The location determinants of discrete services offshoring activities," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(6), pages 926-943, August.
    19. Myriam Mariani, 2002. "Next to Production or to Technological Clusters? The Economics and Management of R&D Location," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 6(2), pages 131-152, May.
    20. Dunning, John H., 2000. "The eclectic paradigm as an envelope for economic and business theories of MNE activity," International Business Review, Elsevier, vol. 9(2), pages 163-190, April.
    21. Amsden, Alice H. & Tschang, F. Ted, 2003. "A new approach to assessing the technological complexity of different categories of R&D (with examples from Singapore)," Research Policy, Elsevier, vol. 32(4), pages 553-572, April.
    22. William H Davidson, 1980. "The Location of Foreign Direct Investment Activity: Country Characteristics and Experience Effects," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 11(2), pages 9-22, June.
    23. Peter J Buckley & Pervez N Ghauri, 2004. "Globalisation, economic geography and the strategy of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(3), pages 255-255, May.
    24. Ram Mudambi, 2008. "Location, control and innovation in knowledge-intensive industries," Journal of Economic Geography, Oxford University Press, vol. 8(5), pages 699-725, September.
    25. Ram Mudambi & Markus Venzin, 2010. "The Strategic Nexus of Offshoring and Outsourcing Decisions," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1510-1533, December.
    26. J. Scott Long & Jeremy Freese, 2006. "Regression Models for Categorical Dependent Variables using Stata, 2nd Edition," Stata Press books, StataCorp LP, edition 2, number long2, April.
    27. Kumar, Nagesh, 2001. "Determinants of location of overseas R&D activity of multinational enterprises: the case of US and Japanese corporations1," Research Policy, Elsevier, vol. 30(1), pages 159-174, January.
    28. Florida, Richard, 1997. "The globalization of R&D: Results of a survey of foreign-affiliated R&D laboratories in the USA," Research Policy, Elsevier, vol. 26(1), pages 85-103, March.
    29. Gatignon, Hubert & Anderson, Erin, 1988. "The Multinational Corporation's Degree of Control over Foreign Subsidiaries: An Empirical Test of a Transaction Cost Explanation," Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(2), pages 305-336, Fall.
    30. Rao, P. M., 2001. "The ICT revolution, internationalization of technological activity, and the emerging economies: implications for global marketing," International Business Review, Elsevier, vol. 10(5), pages 571-596, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jomstd:v:47:y:2010:i:s2:p:1534-1560. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2380 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.