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Are Chinese MNEs more Attracted to Knowledge Intensive City Clusters than Developed Market MNEs when Undertaking Greenfield R&D Related FDI?

Wu, Ludan; Sutherland, Dylan; Peng, Xinghao; Anderson, John

Are Chinese MNEs more Attracted to Knowledge Intensive City Clusters than Developed Market MNEs when Undertaking Greenfield R&D Related FDI? Thumbnail


Authors

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Ludan Wu ludan.wu@durham.ac.uk
PGR Student Doctor of Philosophy

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Xinghao Peng xinghao.peng@durham.ac.uk
PGR Student Doctor of Philosophy

John Anderson



Abstract

Purpose: Cities are host to many of the world’s knowledge intensive research and innovation clusters. As such, they are likely to be attractive locations for emerging market multinational enterprises (MNEs) seeking to engage in knowledge seeking “springboard” type firm-level catch-up strategies. The purpose of this study is to therefore explore whether city-based research-intensive clusters containing deep pools of location bounded (i.e. “sticky”) knowledge are a stronger driver for greenfield research and development (R&D)-related FDI projects for Chinese MNEs than they are for developed market MNEs. Design/methodology/approach: The authors use logistic modelling on 97,163 worldwide greenfield FDI projects to explore the relative likelihoods of Chinese MNEs engaging in R&D-related greenfield (i.e. “strategic asset seeking”) FDI projects as well as how city type (global or research-intensive cluster city) moderates this relationship for Chinese MNEs. Findings: The authors find that Chinese MNEs are more likely to engage in overseas R&D FDI projects (compared with other types of project) than DMNEs and that research-intensive city clusters hold a stronger attraction for Chinese MNEs than developed market MNEs. Research limitations/implications: The authors discuss how the research contributes to the debate on emerging market MNE catch-up theory, as well as that on sub-national city location choice, by highlighting the growing importance of sub-national geography to understanding strategic asset seeking related greenfield FDI. Practical implications: Sub-national city location choice is an important driver of strategic asset seeking FDI for Chinese MNEs, one that both national and local city level policymakers should pay attention to. Social implications: Chinese FDI via aggressive mergers and acquisitions to acquire key technologies has been restricted in recent years. Policymakers must consider whether they may also wish to restrict Chinese greenfield FDI in R&D-related projects, which now exhibit a pronounced upward trend. Originality/value: The authors highlight the growing importance of sub-national geography to understanding strategic asset seeking related greenfield FDI in Chinese MNEs (and how it plays, more generally, a central role in their strategies).

Citation

Wu, L., Sutherland, D., Peng, X., & Anderson, J. (2023). Are Chinese MNEs more Attracted to Knowledge Intensive City Clusters than Developed Market MNEs when Undertaking Greenfield R&D Related FDI?. Competitiveness Review: An International Business Journal incorporating Journal of Global Competitiveness, 33(3), 534-556. https://doi.org/10.1108/cr-02-2022-0026

Journal Article Type Article
Acceptance Date Jul 1, 2022
Online Publication Date Jul 29, 2022
Publication Date 2023-03
Deposit Date Jul 4, 2022
Publicly Available Date Jul 4, 2022
Journal Competitiveness Review
Print ISSN 1059-5422
Publisher Emerald
Peer Reviewed Peer Reviewed
Volume 33
Issue 3
Pages 534-556
DOI https://doi.org/10.1108/cr-02-2022-0026
Public URL https://durham-repository.worktribe.com/output/1202372

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This author accepted manuscript is deposited under a Creative Commons Attribution Non-commercial 4.0 International (CC BY-NC) licence. This means that anyone may distribute, adapt, and build upon the work for non-commercial purposes, subject to full attribution. If you wish to use this manuscript for commercial purposes, please contact permissions@emerald.com





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