Overseas R&D Activity by Japanese MNCs

Development and Limitations

Abstract

The rapid increase in the number of Japanese MNCs’ overseas R&D facilities since the mid-1980s indicates the intention of these firms to become global players. Many Japanese MNCs, notably those in the fields of electronics, automobiles, and pharmaceuticals, have intensified their efforts to exploit foreign markets. They also own overseas R&D facilities to develop products for local markets and/ or acquire technological information or research seeds, from local universities, research institutes, and company laboratories. This study describes the trend and presents such overseas R&D activities handled by Japanese MNCs. The study then analyzes, quantitatively and qualitatively, the characteristics of the overseas R&D management system involved in conducting such activities. The study tests the factors driving research outcomes of overseas R&D by Japanese MNCs using a questionnaire survey and on-site interviews with R&D managers at Japanese MNCs. Furthermore, it assesses overseas R&D management at Japanese MNCs according to the objectives and outcomes of local R&D. The study shows that the factors driving research outcomes vary according to the objectives of overseas R&D, and the local R&D management by Japanese MNCs is likely to correspond to these objectives. Moreover, the results show that the type of management required at overseas R&D facilities differs according to their objectives and functions. However, overseas R&D management by Japanese MNCs continues to use a Japan-centered management system. This study contributes to the literature of global R&D activities and provides an understanding of international R&D management.