Study On Location Choice Of MNCs' R&D Investment In China

With the rapid development of China's market-economy, more and more Multinational Coproartions (MNCs) have transferred their R&D institutions into China. However, compared to the location distribution of their directinvested selling and manufacturing centres, the decision of their R&D investment shows its own characteristics and rules. The location distribution is more unbalanced and the density is higher. This paper focuses on the study on the location choice of MNCs' R&D investment in China in order to find out the internal rules of R&D investment.Firstly, this paper reviews the literature of the location theory focusing on the motivation and affective factors of MNCs' R&D investment overseas. Secondly, based on the regional differences in terms of industrial structures, fund sources and investment styles, we analyse the features of MNCs' R&D investment location in China. Thirdly, we discuss the dynamic initiative and affective factors of the location choice of MNCs' R&D investment. Last but most important, according to these analyses, the paper summarizes two location modes describing the location decision of the R&D investment in China.Based on the affective factors, namely, the market factor, the R&D factor and the R&D environment factor, of the location choice modes, using the existing data to measure the above-mentioned factors, we put forward a Structural Equation Model of the location choice of MNCs R&D investment in China. We use LISREL sample data processing software to identify the effectiveness of these measures, evaluating the model fitness while testing the model coefficients. The results show that the above Structural Equation Model stands: the R&D resource affects the location choice of MNCs' R&D investment in China most, then comes the market factor, followed by the R&D environment factor.According the results of the structural equation model mentioned above, the paper gives some suggestions on how to further improve the investment environments so as to attract more foreign R&D investments.