Study Of The Location Choices Of MNCs' R&D Investment In China

As China is establishing the status as a global manufacturing center, its industrial structure has rapidly changed from labor-intensive stage to technology, knowledge-intensive stage and attracted more and more foreign investment. Multinational Corporations (MNCs),which attempt to seize more shares in the Chinese market, gradually strengthen their R&D investment in China. MNCs'R&D investment in China is a major change in the investment strategy of multinational corporations. It also shows the new features and trends of foreign direct investment (FDI).This paper focuses on the study on the location choice of MNCs'R&D investment in China to find out the internal rules of overseas R&D investment.The author first reviews the literature on the topic of location theory of MNCs' overseas R&D investment then discusses the dynamic history of MNCs'R&D investment in China and analyzes some features of these investment locations. According to these analyses, this paper projects its own theoretical framework and summarizes three types of factors that influence location choice of MNCs'R&D investment in China:regional economic development level factor, regional R&D resource factor and regional R&D environment factor. In the empirical section, use the recent data to model the location choice of MNCs R&D investment in China.The Principal factor method is used to evaluate the model fitness while testing the model coefficients. Results show that these three factors do have influence to Multinational Corporations'R&D location choices in China. Finally According to the empirical results, this paper gives suggestions on how to further improve the investment environments to attract more foreign R&D investments in China.