Department of Management

Globalization of Innovation: The Moderating Role of Project-Level Investment Strategy and Country Type in Location Choice for R&D-Related FDI

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  • Eliane Choquette
  • Stine Jessen Haakonsson
  • ,
  • Peter D. Ørberg Jensen
  • ,
  • Søren Feodor Nielsen
The current stage of globalization involves geographically dispersed research and
development (R&D) investments that are not confined to advanced economies.
These cross-border R&D investments are driven by multinational enterprises’
(MNEs’) strategies for exploring and/or exploiting foreign locations. In this paper,
we analyse location choice and the moderating effect of project-level investment
strategy (i.e. exploration or exploitation) and type of host economy (i.e. advanced
or emerging) on the importance of the innovation framework and local innovation
capabilities. Our analysis of 588 R&D-related foreign direct investment (FDI) projects
in the pharmaceutical and biotech industries during the 2006–2016 period reveals
that whereas a host country’s innovation framework and capability overall do affect
the location decision, their ultimate effects are conditional on the combination of
project-level investment strategy and type of economy. Our findings have policy
implications for FDI policies aiming at enhancing linkages between MNEs and
local actors and national science, technology, innovation and educational policies
and programmes.
Original languageEnglish
JournalTransnational Corporations
Volume28
Issue2
Pages (from-to)1-30
ISSN1014-9562
Publication statusPublished - 2021

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