The determinants of overseas R&D by Japanese firms: an empirical study at the industry and company levels

Abstract Japanese firms actively invested in overseas R&D during the second half of the 1980s. This paper investigates the determinants of their overseas R&D investment by using multiple sources of data (at the industry-area level, at the company level, and for the Japanese investment in the US) and multiple measures of R&D (R&D expenditure abroad, the number of overseas laboratories, and the number of overseas R&D subsidiaries). The results generally agree with the previous ones for American or European multinationals by indicating, for instance, that the support for local marketing is an important motivation. In addition, the support for local manufacturing appears an important motivation especially in Asia and the access to advanced technological knowledge and R&D resources appears an important motivation in the US and Europe.