The Analysis Of Location Decision Factors For Multinational Companies’ R&D Investment In China

With the development of economy, R&D activities get more and more attentionof the enterprise. Multinational corporations’ R&D internationalization processbegins to seep into the developing countries outside of the developed countries. Chinaand India have become two hotspots to attract multinational corporations’ R&Dinvestment. The R&D institutions of Multinational companies built in China bring alot of positive effects to us, and this kind of behavior form the technology spillovereffect, which is beneficial to promote technology innovation ability. And the R&Dinvestment of multinational companies in China presents location uneven distributioncharacteristics. Therefore, the study of location selection factors that influencemultinational companies’ research and development investment has an importantsignificance.Based on the data of the26provincial administrative regions from2004to2008,we select eight factors that may affect the multinational companies’ R&D investmentlocation choice in China, with single variable regression analysis, multivariate factorsregression analysis and analysis of how each variable affects the multinationalcompanies’ R&D investment combined with the connotation of the relative variablesof economics. The main conclusions are: the provinces and cities’ actual use offoreign investment, the supply of science and technology talent, intellectual propertyprotection degree, the degree of marketization reform and the penetration levelmultinational firms to the host area market play decisive roles, and these factors havesignificant positive relationship on multinational companies’ R&D investmentinflows. Multinational companies’ R&D investment in the past has deep influence oncurrent R&D input. In the six decisive factors, the actual use of foreign investment inthe host, the supply of science and technology talent, intellectual property protectiondegree and multinational companies’ past R&D investment scale are the decisivefactors of more influence.The size of the market in the host and the governmentfiscal expenditure on science and technology don’t play a decisive role on themultinational companies’ R&D investment.On the basis of empirical analysis, this paper put forward five suggestions forhow to correctly guide and attract the multinational companies’ research anddevelopment investment, and narrow the regional differences in R&D investment.The government should strengthen the protection of intellectual property rights, paymore attentions to science and technology talents’ training, improve the policyenvironment of the multinational corporations’ R&D investment, improve the basisenvironment of high-tech parks and perfect R&D service system.