Foreign R and D in developing countries: Empirical evidence from Shanghai, China

This study examines foreign R&D in Shanghai and reveals that Shanghai has become one of the most concentrated centres of foreign R&D in China. Through interviews at 18 foreign R&D facilities in Shanghai, the study confirms the findings from previous studies that the majority of foreign R&D in China is adaptive and tactical in nature to serve the Chinese market. However, strategic foreign R&D does exist and such establishments are engaged in projects not only for China's local markets, but also for the global market; they are not only involved in short-term product development, but also in long-term original research. Shanghai's concentration of foreign R&D is clearly contingent upon the convergence of forces at the national, regional and local scales: China's burgeoning market at the national scale, the concentration of manufacturing and foreign investments in the Yangtze River Delta at the regional scale, and Shanghai's eminent position in China's economic landscape and its attractiveness to quality labour at the local scale.