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Offshore versus domestic: Can EM MNCs reach higher R&D quality abroad?

Abstract

In the current discourse about the technological development of emerging market multinational companies (EM MNCs), the internationalization of research and development (R&D) activities is increasingly discussed as a strategy for catching-up to established MNCs. EM MNCs attempt to use international R&D to tap into technologically superior resources abroad which are not available to them in their home market. This study compares the performance of domestic and offshore R&D activities to look into EM MNCs’ ability to conduct high-quality R&D abroad. We use the Chinese telecommunication equipment manufacturer Huawei as a best practice case study. To map their worldwide patent quality pattern, we propose a multiple-patent-office-approach to ensure a balanced view on their activities with data from SIPO, USPTO and EPO. We also employ three different measures to capture different dimensions of patent quality. The results of the empirical model support the assumption of higher quality for patents with knowledge from advanced offshore locations.

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Acknowledgements

We would like to thank Rainer Frietsch and Peter Neuhäusler at the Fraunhofer Institute for Systems and Innovation Research ISI for access to their PATSTAT database, their support in retrieving the data and their methodological input regarding the subject of patent analysis. An earlier version of this paper was presented at the AAG annual meeting 2016. We would also like to thank Arianna Martinelli as well as Jaeyong Song and Mike Peng at the IACMR Conference 2016 for comments and suggestions as well as an anonymous reviewer for providing valuable feedback on the paper. Furthermore, we wish to thank Lisett Diehl for the cartographic artwork, Fiete Krass for supplementary data research as well as bibliographic formalities, and Kerry Jago for proofreading. We acknowledge funding from the Foundation German-American Academic Relations (Grant Number: T260/25622/2014/kg).

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Correspondence to Kerstin J. Schaefer.

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Schaefer, K.J., Liefner, I. Offshore versus domestic: Can EM MNCs reach higher R&D quality abroad?. Scientometrics 113, 1349–1370 (2017). https://doi.org/10.1007/s11192-017-2533-5

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  • DOI: https://doi.org/10.1007/s11192-017-2533-5

Keywords

  • R&D internationalization
  • Emerging market MNCs
  • R&D off-shoring
  • Chinese MNCs
  • Measuring patent quality
  • Multiple-patent-office-approach