Foreign Direct Investment and International R&D Collaborations in Japanese Multinational Enterprises

Author Name IKEUCHI Kenta (Fellow, RIETI)
Creation Date/NO. February 2020 20-J-012
Research Project RIETI Data Management Project
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How does economic globalization relate to internationalization of knowledge production activities? Existing research has not fully clarified the effects of the spatial interdependence of foreign direct investment and international R&D collaboration on R&D performance and productivity. Therefore, in this study, a database that interconnected the data on foreign direct investment of Japanese multinational corporations and international patent data is constructed, and the spatial interdependence of foreign direct investment and the international joint invention of patents is analyzed. As a result of analyzing panel data for a long period of about 20 years since the 1990s, it was found that the locations of overseas subsidiaries and the locations of international cooperation partners are interrelated. In addition, when a research and development center is located near an overseas joint research partner, a high-quality invention tends to be patented. On the other hand, no clear results were obtained regarding the effects of international joint R&D on corporate performance in countries where R&D centers are located. These results suggest that Japanese multinationals use overseas subsidiaries as bases for international collaboration in R&D, but that the technological output of international joint research may not be strongly linked to corporate performance.