Abstract:

Internationalizing R&D investment is a trend for innovative firms and many studies have examined this issue, but most of them report only on the knowledge of R&D internationalization of developed countries. There are only a few studies that have investigated R&D internationalization from developing countries. World Investment Report 2005 from UNCTAD [1] reveals that foreign R&D activities by transnational corporations (TNCs) from developing countries have grown quite fast. As such, further research on developing countries can enrich the literature of R&D internationalization.  Based on data from 75 of the top 1000 Taiwanese manufacturers, we examine how these firms establish their overseas R&D centers and connect with global innovation networks over time by conducting both data searching and in-depth interviews. We categorize four paths of internationalizing R&D for Taiwanese firms and explore three types of technology strategies through in-depth interviews with top management. The three technology strategies are ‘technology driven strategy’, ‘cost driven strategy’, and ‘keeping flexible strategy’. By comparing three financial indexes, we find that firms adopting a keeping flexible strategy gained the highest average performance, and those firms focusing on cost performed the worst. The results provide valuable insights to the top management of firms in developing countries.