What factors determine thesubsidiary mode of overseas R&D by developing-country MNEs? Empirical evidence from Chinese subsidiaries abroad

• Main Authors: WANG, Yanyu, XIE, Wei, LI, Jizhen, LIU, Chenxi
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2018
• Subjects: Finance; Finance and Financial Management
• Online Access: https://ink.library.smu.edu.sg/phd_publications_collection/2; https://ink.library.smu.edu.sg/context/phd_publications_collection/article/1001/viewcontent/R_D_Management___2017___Wang___What_factors_determine_the_subsidiary_mode_of_overseas_R_D_by_developing_country_MNEs___1_.pdf
• Institution: Singapore Management University

This study examines the determinants of the subsidiary modes of overseas research anddevelopment (R&D) by Chinese multinational enterprises (MNEs). Based on resource-based view and absorptive capabilities, we propose that financial resources and technologi-cal resources have different effects on the selection of overseas R&D subsidiary modes,which are competence-exploiting mode or competence-creating mode. This is supportedby the empirical results in this paper using data from a survey of 40 Chinese overseasR&D subsidiaries. The results demonstrate that the parent firms with richer financialresources and more R&D expenses prefer the competence-exploiting mode, while the par-ent firms with more R&D personnel favor the competence-creating mode. Additionally,this study finds that firms matching our mode choice model tend to enjoy a higher level ofinnovative performance.