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R&D offshoring and technology learning in emerging economies: Firm-level evidence from the ICT industry

Author

Listed:
  • Huang, Can

    (UNU-MERIT)

  • Qu, Zhe

    (College of Management, Georgia Institute of Technology)

  • Zhang, Mingqian

    (School of Economics, Hebei University of China)

  • Zhao, Yanyun

    (Center for Applied Statistic and School of Statistics, Renmin University of China)

Abstract

This paper studies the impact of the R&D offshoring of multinational enterprises on the firms in host emerging economies. We develop a two-stage non-cooperative game to analyze the strategic interaction between multinational and host country enterprises engaged in R&D investment. An empirical analysis of 12,309 manufacturing firms in the ICT industry in China shows that R&D offshoring has a positive effect on the intensity of the R&D of host country firms. However, the magnitude of the impact depends on both the technological and geographical distance between the multinational and host country firms. The policy implications of these findings are that the governments of host country should be cautious about allowing advanced multinational R&D investment in under-developed sectors, but they should encourage such investment in developed sectors; and that local governments should be involved in R&D policy making because the positive impact of multinational R&D offshoring diminishes as the geographical distance between the multinational and host country firms increases.

Suggested Citation

  • Huang, Can & Qu, Zhe & Zhang, Mingqian & Zhao, Yanyun, 2007. "R&D offshoring and technology learning in emerging economies: Firm-level evidence from the ICT industry," MERIT Working Papers 2007-023, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2007023
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    File URL: https://www.merit.unu.edu/publications/wppdf/2007/wp2007-023.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Research and Development; Offshoring; Spillovers; Emerging Economies;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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