R&D Internationalization to China: MNEs new favourite destination
Shows how foreign MNEs transform low-value-adding operations in the South into high-value-adding R&D operations
[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, vol 37, no. 2, pp. 553-585. 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
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Copyright © 2022 Shasha Zhao. All rights reserved. Page last modified on Thu 14 Apr 2022 15:35
Dr Zhao is Associate Professor (Senior Lecturer) of International Business and Innovation in the Department of Strategy and International Business, Surrey University Business School. She is an Associate of Centre for International Business and Development at Sussex University, UK. Her research focuses on global innovation strategy and knowledge management of multinationals in and from emerging economies, and impact on sustainable development. She is Associate Editor of Asian Business and Management and Senior Editor of European Journal of International Management and an active editorial member of Management International Review. She has published in many IB and Management journals, including International Business Review, Journal of World Business, Asia Pacific Journal of Management, Human Resource Management Journal, International Marketing Review, Thunderbird International Business Review, and Critical Perspectives on International Business. Her lead-authored paper on multinational R&D in emerging Asia won the Best Paper Award at Euro-Asia Management Studies Association (EAMSA) Annual Meeting, 2019. She is Co-Founder and Co-Chair of Academy of International Business Sustainability Shared Interest Group.
