Pursuing opportunities in distance: the determinants of overseas R&D by Chinese multinationals

This study investigates two relevant dimensions of institutional distance – knowledge and economic distance – that influence the overseas research and development (R&D) intensity of emerging market multinational enterprises. We undertake a longitudinal analysis of 121 listed Chinese manufacturing multinational enterprises for the period 2011–2016. The results reveal that the enterprises' overseas R&D is more intense in host countries with greater knowledge and economic distance. Moreover, as the strength of intellectual property rights protection in host countries grows, the positive effects of knowledge and economic distance on the enterprises' overseas R&D intensity become weaker. We also find that political ties with home country governments strengthen the positive relationship between knowledge distance and the enterprises' overseas R&D intensity, while its moderating effect on the relationship between economic distance and overseas R&D intensity is insignificant.