R&D Internationalization to China: MNEs new favourite destination
[Guest post by my Middlesex colleague and co-author Shasha Zhao. In this post Shasha shows how foreign MNEs transform low-value-adding operations in the South into high-value-adding R&D operations.]
The latest developments in international business show that emerging economies such as China have been gaining an unprecedented flow of inward R&D FDI. How has a country that, for many years, had the reputation of being the ‘global factory’ transformed to become a hotspot for MNE R&D? What was the process it went through? How did the role of MNE subsidiaries evolve from being production-oriented to R&D-focused?
In order to answer these questions in the context of China, we undertook a historical longitudinal case study of a global pharmaceutical MNE, AstraZeneca, in China between the period of 1993 and 2017. Specifically, we have focused on exploring the process by which the MNE’s low-value-adding operations in China are transformed into high-value-adding R&D operations. We constructed a framework of evolution consisting of four major waves of R&D internationalization and corresponding R&D objectives. To better understand how these waves have evolved over time, we traced the process of change using a single historical case study.
AstraZeneca in China (1993-2017): gradual local development and gradual firm transformation
Based on comprehensive and detailed historical data of AstraZeneca in China, we find evidence of idiosyncratic location-bound conditions offering both opportunities and resources. The gradual development of these favourable conditions, along with AstraZeneca’s deepening local knowledge, triggered a transformation process in their operations in China. We offer important historical insights, which present a platform for future research providing more nuanced theoretical explanations of the four waves of R&D internationalization.
- Zhao, S.; Tan, H.; Papanastassiou, M.; Harzing, A.W. (2020) The internationalization of innovation towards the South: A historical case study of a global pharmaceutical corporation in China, Asia-Pacific Journal of Management. Available online... - Publisher's version (read for free)
The paper's first author is my talented young Middlesex University colleague Shasha Zhao (PhD Manchester Business School). Shasha’s current research focuses on R&D internationalization towards the South and its impact on local development. Her work can be found on ResearchGate, Google Scholar, and www.shashazhao.com
- MNC entry mode: it is not just about choice!
- Managing expatriates’ identity: subtle desire, big impact
- The golden triangle: standardization, localization or dominance?
- Testing key IB typologies: Bartlett & Ghoshal and Gupta & Govindarajan
- Transfer of HR practices in multinational companies
- Should we distance ourselves from the cultural distance concept?
- New research monograph: Managing expatriates in China
Copyright © 2020 Shasha Zhao. All rights reserved. Page last modified on Tue 24 Mar 2020 17:22
Shasha Zhao is a senior lecturer in international business at middlesex university, london. She has published in some of the top business and management journals, including Asia Pacific Journal of Management, Human Resource Management Journal, and International Marketing Review. Apart from publications, she also serves as an editorial board member of several journals including Cross-Cultural and Strategic Management, European Journal of International Management, International Journal of Emerging Markets. She is also a organising committee member of CYGNA (support network for women academics in business and management).