R&D offshoring and technology learning in emerging economies: Firm-level evidence from the ICT industry
Zhe Qu, Can Huang, Mingqian Zhang & Yanyun Zhao
#2007-023
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.
Keywords: R&D; offshoring; spillover; emerging economies
JEL Classification: F23; O32
UNU-MERIT Working Papers
ISSN 1871-9872