Doctoral Dissertation Research: A New Stage in Global Innovation Networks? Why Multinational Corporations Locate Advanced Global Innovation Centers in Beijing and Shanghai

University Of California-Los Angeles, Los Angeles CA

Investigators

Abstract

For many decades, a fundamental tenant of development economics is that developing countries have great difficulty becoming creators of technology. This assumption has been based on the belief that multinational corporations (MNCs) function according to a "locational hierarchy" of global innovation networks, with "intellectual" activities located in more advanced countries while routine production is situated in developing countries. Empirical evidence indicates that these traditional assumptions no longer are viable. In recent years, many world-class MNCs now are locating advanced research and development (R&D) centers in Shanghai and Beijing, China. This trend is typified by Microsoft's establishment of its first academic-style R&D center in Beijing in 1998, three years before it established a similar center in Silicon Valley in 2001. Once principally a routine production site, China appears to have become a "center of excellence" in global innovation networks. This advanced type of MNC activity represents not only an important turning point in China's development but a possible harbinger of developments that may occur in other large developing countries, thereby transforming the processes of globalization and economic development. This doctoral dissertation research project will examine the processes that have been evident in China. The focal questions of the project are: Why are MNCs locating their R&D centers in developing countries like China? How can a developing country like China integrate itself at the highest level of global innovation networks? An ancillary question to be examined is: Why have MNC R&D centers tended to concentrate in Beijing (a highly controlled political city) rather than Shanghai (a commercialized global city)? The doctoral candidate will conduct case studies of a set of MNCs that have established R&D centers in China. She will conduct surveys of company officials, and she will undertake statistical analyses of economic data. This project will contribute to the understanding of how developing cities become integrated into global innovation networks. This study will consider the increasingly important role of global (exogenous) factors in the study of knowledge-based development of city-regions. Moreover, it will explore the thesis a developing nation's strategy for knowledge-based economic development no longer should rely solely on local and national (endogenous) factors. This project will consider the relationship of local, national, and global variables, especially in developing countries or transitional economies. Among the broader impacts of the project are practical insights regarding how cities and regions can mobilize its knowledge assets (human capital, specialized industrial clusters, local business networks, enabling industrial policies, and/or skilled labor policies) to bargain with both the central government and the MNCs to improve its competitiveness in the global economy. Understanding the current direction of extensions of global innovation networks and the ways in which cities and regions can cultivate and capitalize on these processes will provide policy makers and investors alike with the tools necessary to support and maintain more dynamic forms of economic growth. As a Doctoral Dissertation Research Improvement award, this award also will provide support to enable a promising student to establish a strong independent research career.