International R&D and technological competence of the firm

This study looked at the effect of the internationalization of R&D on a firm' s technological competence. Using a conceptual framework based on the resource-based view of the firm, this study found systematic evidence that international R&D does have a positive effect on a firm's technological competence. By researching US firms which conduct R&D in Japan, this study has showed that international R&D strategy does affect the accumulation of a firm's technological resources and enhances its technological competence measured along in two dimensions; technological effectiveness, which is operationalized by the number of patents, and technological efficiency, which is operationalized by the number of patents divided by R&D spending.; This study also found that the effect of conducting international R&D depends on the industry. The effect on a firm's technological effectiveness depends on the host country's global competitiveness in the industry which the firm is in, as shown in the case of electronics industry. However, as shown in the case of the chemical industry in Japan, conducting R&D abroad can positively affect a firm's technological efficiency even if the focal industry itself does not have global competitiveness. Other factors, such as physical proximity to leading customers in globally competitive industries played a role in enhancing technological efficiency in the chemical industry.; This study also found that the effect of conducting international R&D depends on how long the firm has been operating in the host country. Contrary to the expectation that more experience leads to more competence, depending on the dimension of technological competence studied and industry, the firms which started conducting R&D abroad more recently did better than the firms which started earlier.