Tnc R & D Internationalization And China Can Learn From

The traditional theories about multinational corporations, studying from the perspective of the developed countries, can not effectively interpret the investment of the multinational corporations of the developing countries. Due to the large number of the multinational corporations in the developed countries, the studies of the economists and management experts are targeted at them and thus confined to them. Hence none of the traditional theories, including Monopolistic advantage theory,Comparative advantage theory,Product lifecycle theory and so on, can effectively interpret the motivation behind the investment of the multinational corporations of the developing countries in the developed countries. And the developing countries' theories about multinational investment, which can only interpret the investment of the multinational corporations of the developing countries in the other developing or underdeveloped countries, can not interpret their investment in the developed countries. Thus this phenomenon needs some new theoretical interpretation. The purpose of the present thesis is to explore this new interpretation and provide some suggestions for the international investment of China's multinational corporations.With the development of technology and economic globalization, the internationalization of R&D becomes increasingly predominant in the multinational corporations' direct investment. According to the previous studies, the internationalization of R&D of the multinational corporations can obtain not only the advantage of technical monopoly but also the advantage of technical competition through acquiring the host country's knowledge spillover and technology diffusion, which can be transformed into the multinational corporations' competitive advantage. This advantage can fortify the corporations' original monopolistic advantages and make up for their disadvantages. In addition, in this compensatory assets R&D plays a leading role. Therefore, the author presents Advantage outsourcing theory, which can interpret not only the internationalization of R&D of multinational corporations but also the investment of the multinational corporations of the developing countries in the developed countries.