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CIRCLE, Center for Innovation, Research and Competences in the Learning Economy, Lund University Papers in Innovation Studies, CIRCLE, Center for Innovation, Research and Competences in the Learning Economy, Lund University

No 2008/18:
Regional innovation systems and the global location of innovation activities: Lessons from China

Chen Yun-Chung (), Jan Vang () and Cristina Chaminade ()

Abstract: The global location of R&D centres by MNCs is a rather new phenomenon; especially when it comes to establishing R&D centres in developing countries. The existing and rather limited literature on globalization of innovation provides four possible explanations of why multinationals locate R&D departments in developing countries: reduce research costs, access large markets, tap into a large pool of qualified human resources or benefit from knowledge spillovers available in the local/regional system of innovation. The empirical research presented in this paper reveals that none of these arguments can fully explain the increasing location of R&D departments in China. The in-depth study of MNCs R&D centres in Beijing and Shanghai, China, reveals that specific aspects of market, technological and political uncertainty provide more adequate to explain the increasing presence of R&D labs from MNCs in developing countries such as China and thus calls for an integration in the regional innovation systems framework.

Keywords: R&D centres; MNCs; developing countries; China; Regional Innovation System; (follow links to similar papers)

JEL-Codes: O30; (follow links to similar papers)

21 pages, December 1, 2008

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