Technology seeking, R&D localization and comparative advantage: evidence from Chinese R&D-oriented OFDI

ABSTRACT

Using the logit model of discrete explained variable, this article explores the theoretical logic and underlying mechanism of Chinese outward foreign direct investment (OFDI) in developed countries. It finds that Chinese enterprises conduct R&D-oriented OFDI in countries with advanced technologies and rich R&D resources. These enterprises seek to learn applied rather than cutting edge technologies. Furthermore, Chinese R&D-oriented OFDI, which focuses on technology seeking and R&D localization, follows the principle of comparative advantage. The research provides new evidence for OFDI from China and a theoretical explanation of its underlying logic.

KEYWORDS:

• OFDI
• technology seeking
• R&D localization
• comparative advantage

JEL Codes:

• F21-International Investment
• F23-Multinational Firms

JEL CLASSIFICATION:

• F21
• F23

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ Developed countries considered in this article are the major economies with per capita nominal GDP more than US $30,000.