The internationalization of research and development: A firm level study

This dissertation research explores the internationalization of research and development within a high-technology industry. The internationalization of research and development is an increasingly important phenomenon in many sectors, including industries such as electronics, telecommunications and aircraft manufacture. When an industry faces incentives to internationalize its research and development activities, not all of the firms in the industry respond to these forces. I examine which firms in an industry will respond to the incentives to internationalize first and to establish foreign research and development activities. I also explore whether these activities will take the form of sponsored, collaborative or controlled research. My predictions regarding firms' foreign research and development activities are based on the market experience, research capability and technological skills of individual firms. This work extends the previous theories regarding the internationalization of research and development by considering firm specific complementary technical skills.; The context of my study is a sample of 66 incumbent and new entrant firms in the Japanese pharmaceutical industry. The internationalization of research and development is a recent phenomenon in the Japanese pharmaceutical industry and thus provides an opportunity to capture the scope of globalization within a limited time period. I introduce a new measure of firm technical skills based on patent classifications.; I find that the traditional pharmaceutical firms with complementary technical skills are earlier to establish foreign research and development activities. The new entrant firms are earlier to establish foreign research and development activities when they have previous foreign market experience. The results indicate intriguing differences between traditional pharmaceutical firms and the new entrants in terms of their motivations for internationalization of research and development. The results provide clear support for a theoretical framework that combines elements of the product life cycle theory, the internalization perspective, and complementary technical assets in order to explain the phenomenon of internationalization of research and development.