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What determines overseas R&D activities? The case of Japanese multinational firms

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  • Shimizutani, Satoshi
  • Todo, Yasuyuki

Abstract

This paper explores what factors determine the nature, extent, and location of Japanese multinationals' R&D activities abroad. Taking advantage of a rich micro-level dataset from the survey on Japanese overseas subsidiaries, the study distinguishes between two types of overseas R&D: basic/applied research and development/design. We find several differences between the determinants of those R&D activities. These differences confirm the view that basic/applied research of overseas subsidiaries aims at the exploitation of foreign advanced knowledge, whereas their development/design activities are mostly influenced by the market size of the host country. Our results provide a convincing and comprehensive explanation of the geographical distribution of overseas R&D by Japanese MNEs.

Suggested Citation

  • Shimizutani, Satoshi & Todo, Yasuyuki, 2008. "What determines overseas R&D activities? The case of Japanese multinational firms," Research Policy, Elsevier, vol. 37(3), pages 530-544, April.
    • Handle: RePEc:eee:respol:v:37:y:2008:i:3:p:530-544
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