Disentangling the relationship between R&D internationalization and corporate’s innovation performance – evidence from Chinese MNEs

Abstract

Development of the global economy makes a deeper level of interaction between the domestic and international markets in recent years. For this reason, more and more firms choose to internationalize part of their value chain in foreign countries, including research and development (R&D) activities. This paper aims to investigate the impact of R&D internationalization of Chinese MNEs on their corporate’s innovation performance in terms of intensity and diversity. Using data of the Top 100 MNEs from China in 2021, I perform an Ordinary Least Square (OLS) regression to test the model. The results indicate that there is a U-shaped relationship between the intensity of R&D internationalization and firm’s innovation performance and an inverted U-shaped relationship for the diversity of R&D internationalization. This paper expands the literature on innovation outcomes of R&D internationalization in the context of emerging economies and also provides guideline for those managers in MNEs to realize the threshold in the process of R&D internationalization to maximize their benefits.