Scandinavian Working Papers in Economics

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

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

Chen Yun-Chung (), Jan Vang () and Cristina Chaminade ()
Additional contact information
Chen Yun-Chung: Hong Kong University of Science and Technology, Postal: Hong Kong
Jan Vang: CIRCLE and Copenhagen Institute of Technology, Aalborg University, Postal: Institut 6 - Medieteknologi og Ingeniørvidenskab , Lautrupvang 15, 2750 Ballerup, Denmark
Cristina Chaminade: CIRCLE, Lund University, Postal: PO Box 117, Sölvegatan 16, SE-22100 Lund, Sweden

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

JEL-codes: O30

21 pages, December 1, 2008

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