Global R&D Activity of U.S. MNCS: Does National Culture Affect Investment Decisions?

This research reports on an initial exploratory effort to empirically refine the role national culture plays in the location of foreign research and development (RD Kuemmerle, 1999), one potential factor affecting the location of foreign RD and it advances the conceptual propositions of Jones and Davis (2000) on the potential link between culture, foreign R&D investment and the types of R&D activities conducted abroad. Accordingly, this exploratory effort: 1) empirically tests if national culture is a significant determinant of foreign R&D investment in general, and 2) discusses how that knowledge might inform the location decision and our understanding of the differing types of R&D activities undertaken abroad. THEORY AND PROPOSITIONS The eclectic theory of foreign direct investment (Dunning, 1988) suggests that certain locations offer differential advantages to the locating firm, which helps explain the investment decision. The eclectic model also suggests that locational advantages vary according to the activity performed by the investing firm in the host country. …