R&D Offshoring And Technology Learning In Emerging Economies: Firm-Level Evidence From The ICT Industry

This paper studies the impact of the R&D offshoring of multinational enterprises on the firms in host emerging economies. The authors 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.