Location of foreign research and development in China

Abstract

This study examines the location of foreign research and development activities within China, using the 2004 China Economic Census data, published in 2006. The study reveals that the scale of foreign R&D in China is significant and involves a few thousand of foreign enterprises, much broader than what has been reported before. It also finds that foreign R&D activities in China are highly concentrated in a few costal provinces and cities including Guangdong, Jiangsu, Shanghai, Zhejiang, Fujian and Beijing, though the degree of concentration in Beijing is significantly lower than what was reported before. The results of the analyses demonstrate that proximity to foreign manufacturing investment dictates the location of foreign R&D. Also important is the quality of local technological infrastructure, which is a composite measurement of availability of quality labor and their creativity. However, labor costs and infrastructure do not show consistent or significant impacts.

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