عوامل تعیین کننده فعالیت های R & D در خارج از کشور چیست؟ مبحث شرکت های چند ملیتی ژاپنی

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.

There has been a remarkable expansion of overseas R&D activities by multinational enterprises (MNEs) in recent years (Kuemmerle, 1999, Granstrand, 1999, Patel and Vega, 1999, Pearce, 1999, Pearce and Papanastassiou, 1999 and Le Bas and Sierra, 2002). Japanese MNEs are not exception: a drastic increase in their overseas R&D activities can be observed from the beginning of the 1990s onward. In 1989, overseas R&D expenditure by Japanese MNEs amounted to only 0.7% of the total R&D investment spent domestically,1 although Japan's foreign direct investment increased significantly during the 1980s in response to rapid yen appreciation. However, the ratio of overseas to domestic R&D expenditure in 2002 was 4.1%, indicating that there has been a significant expansion of overseas R&D activities by Japanese MNEs in the 1990s. In addition to the marked expansion, noteworthy changes in locational distribution of overseas R&D can be observed. Until the early 1990s, overseas R&D activities were concentrated in the advanced economies of North America and Europe, but this is no longer the case today. Instead, over the past decade and a half or so, Japanese MNEs have also invested in R&D in newly industrialized economies and less developed countries, especially those in East Asia, as we will see in detail later. The purpose of this study is to explore the determinants of the locational choice of overseas R&D activities by Japanese MNEs, highlighting differences in two types of overseas R&D: basic/applied research and development/design. More precisely, since we find that Japanese overseas subsidiaries performing basic/applied research are jointly performing development/design except for a few cases, as we will explain later, we distinguish between overseas subsidiaries performing both basic/applied research and development/design and those performing only development/design. For brevity of presentation, we will henceforth denote the former type of R&D activities (i.e., the combination of basic/applied research and development/design) as Type R activities, whereas the latter (i.e., only development/design) Type D. Accordingly, this paper examines what stimulates Type R and Type D activities of Japanese overseas subsidiaries. We presume a priori that Type R activities are more likely to aim at the utilization and acquisition of foreign advanced knowledge that would otherwise be unavailable in the home country, while Type D activities mostly target at the adaptation of existing technologies and products to the local conditions of the host country.2 These different purposes of overseas R&D have been pointed out by existing studies such as Kuemmerle (1999), Granstrand (1999), Pearce (1999), Le Bas and Sierra (2002), and Iwasa and Odagiri (2004).3 Although several studies have already examined the determinants of overseas R&D using Japanese firm-level data ( Odagiri and Yasuda, 1996 and Belderbos, 2001) and industry-level data for the United States and Japan (Kumar, 2001), these studies do not distinguish between the two types of overseas R&D activities. However, it is quite plausible to assume that the determinants of the two types are different. For example, overseas subsidiaries are more likely to perform overseas R&D for acquisition of foreign knowledge in technologically advanced countries, whereas they tend to perform R&D for adaptation to local conditions in countries with a large market size. This paper investigates such differences between the determinants of the two types of R&D activities abroad, using a rich firm-level panel dataset for Japanese MNEs. Our dataset consists of data for Japanese parent firms and their overseas subsidiaries both in developed and less developed countries in R&D-intensive manufacturing industries, covering the period 1996–2001. As far as we are aware, ours is the most comprehensive dataset available on overseas R&D activities of Japanese MNEs. Our estimates are based on a multinomial logit model, in which Japanese overseas subsidiaries are faced with three options: to perform Type R, Type D, or no R&D activities. We indeed find that Japanese MNEs are more likely to perform Type R activities abroad when the national R&D expenditure-to-GDP ratio of the host country, which represents the host country's knowledge level, is high. In contrast, the R&D expenditure-to-GDP ratio of the host country has no impact on whether Japanese MNEs engage in Type D activities in that country. In addition, an increase in host-country GDP, a proxy for the local market size, raises the probability of Japanese MNEs’ performing Type R activities in that country and the probability of performing Type D to a similar extent. Since Type R activities include both basic/applied research and development/design, whereas Type D represents only development/design, the difference in determinants between Type R and Type D activities may represent determinants of basic/applied research. Therefore, our findings are consistent with the view that basic/applied research of overseas subsidiaries aims at the exploitation of foreign advanced knowledge, whereas their development/design is mostly determined by the size of the local market. Other factors that influence overseas R&D include the parent firm's R&D expenditure-to-sales ratio, the overseas subsidiary's sales and years of operation, the distance from Tokyo, and the wage level of local engineers. Those results are also supported by conditional logit estimation that assumes a different decision making process from that assumed in the multinomial logit model. These estimation results explain what drives the actual patterns of overseas R&D by Japanese MNEs. For example, during the period 1996–2001, Type R activities by Japanese MNEs were largely concentrated in technological-frontier countries and some newly industrialized economies such as South Korea and Taiwan. This pattern suggests that, indeed, Type R activities are promoted by the high knowledge levels of those countries, and in the case of South Korea and Taiwan, this factor is further enhanced by their geographical proximity to Japan. Another major trend in recent years has been the rapid increase of overseas R&D by Japanese MNEs in China. Our estimation results suggest that the underlying factor is the expansion of the country's local market based on brisk economic growth. The remainder of the paper is organized as follows. Section 2 describes the dataset used in this study. Section 3 provides an overview of recent trends and patterns in the overseas R&D activities of Japanese MNEs and highlights some notable characteristics. Section 4 presents the specification of our model to empirically examine the locational determinants of overseas R&D activities, and Section 5 provides the estimation results. Section 6 concludes.

This paper took advantage of a rich micro-level dataset on Japanese subsidiaries to explore what determines Japanese MNEs’ R&D activities abroad. We were able to discern several interesting patterns in such overseas R&D activities since the mid-1990s. First, there was a slight increase between 1996 and 2000 in the share of overseas subsidiaries that perform R&D. Second, Japanese MNEs largely perform both basic/applied research and development/design (Type R activities) in frontier countries, such as the United States, Britain and France, as well as in the two newly industrialized East Asian economies of South Korea and Taiwan. In other parts of East Asia, including China, Hong Kong, Indonesia, Malaysia, Thailand and Singapore, the bulk of overseas R&D-performing Japanese MNEs consists of those performing development/design only (Type D activities), although Japanese MNEs also perform basic/applied research in these countries to some extent. Our empirical investigation based on a multinomial logit model examined the determinants of overseas R&D by Japanese MNEs, distinguishing between the two types of overseas R&D: Type R and Type D. We found several differences between the determinants of the two types. Most notably, the ratio of national R&D expenditure-to-GDP of the host country, representing the knowledge level of the host country, was found to have a positive impact on the probability of performing Type R activities but no significant impact in the case of Type D. In addition, the parent firm's R&D expenditure-to-sales ratio, representing the knowledge level of the parent, had an insignificant effect on Type R activities but a positive effect on Type D. On the other hand, the probability of performing both types of R&D activity was positively correlated with the GDP, standing for the size of the market, of the host country. These results suggest that basic/applied research in overseas subsidiaries aims at the exploitation of foreign advanced knowledge, whereas the primary role of overseas development/design is to adapt products and technologies to local conditions using parent firms’ existing knowledge when the local market is large. Other important factors that affect overseas R&D decision are overseas subsidiaries’ size and years of experience in the host country, geographical proximity to Japan, and the wage level of local engineers. Taken together, these factors provide a plausible and comprehensive explanation of the geographical distribution of overseas R&D by Japanese MNEs.