R&D internationalization in asian developing countries: evidence from european multinationals

In the past decade, European companies have turned from using overseas R&D centers simply to localize products, to tapping them as a source of R&D for products globally. Today, many European MNEs have R&D activities at different locations inside and outside their domestic markets and this phenomenon is even more relevant in the developing Asian countries. The aim of this paper is to highlight the R&D internationalization activities of MNEs from Europe in Asian developing countries. 152 European MNEs has been taken from the list of the largest 500 corporations in the world published annually by Fortune magazine. Thus, using a standardized questionnaire, it has been investigated whether firms follow a knowledge augmenting or knowledge exploiting strategy. The results show a positive relation between the choice to settle R&D units in Asian developing countries and the sale of innovative products there, concluding that firms follow a knowledge exploiting strategy, establishing their whole value chain to Asian developing countries.