Reserach On Internal And External R&D Of Chinese Enterprises

Since the 1970s, with the development of economic globalization and multinational corporation, here comes R&D globalization. Developed countries have conduct external R&D for several decades. To realize the best global combination of innovation, the US, Japan and Western Europe kept setting up R&D center in different areas. Their R&D laboratories transferred from domestic to other countries gradually.Recently, China's domestic R&D has expanded rapidly with tremendous R&D investments. As a developing country, China has already conduct technology sourcing FDI, for the sake of obtaining advanced technology and improving enterprises'technical level, However, China's external R&D is still laggard. What Chinese enterprises to do to overtake developed countries'technology is to conduct external R&D initiatively and strengthen the absorptive and innovative capacities.Researches on enterprises'R&D are mainly separated—either on internal R&D or on external R&D. There are few literatures which put domestic R&D and external R&D in a frame and analyses Chinese enterprises'tactic decision-making. Based on foreign theoretical research, this paper analyses how could Chinese enterprises make full use of R&D resources to upgrade technology. First this paper indicates current situation and problems of Chinese domestic R&D. After that it illustrates the necessity and feasibility of Chinese external R&D, and conducts case study about ZTC. Through the game model, it analyses enterprises'optimal allocation between internal R&D and external R&D. The analysis based on different parameters comes to the conclusion that the technical level of China is lower than developed countries', and when the technical accumulation and innovative efficiency of developed countries are distinctly higher than that of China, Chinese enterprises could strengthen the absorptive and embedded capacities to enhance the efficiency of obtaining foreign technology and internal knowledge transferring. In one word, it is a wise option for Chinese enterprises to conduct external R&D initiatively. At the end of this paper some advice was given to Chinese enterprises on how to conduct external R&D better.