The internationalization of innovation towards the South: A historical case study of a global pharmaceutical corporation in China (1993–2017)

Shasha Zhao, Hui Tan, Marina Papanastassiou, Anne-wil Harzing

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Intensified competition means that multinational enterprises (MNEs) are increasingly concerned with locating innovation activities in the most appropriate locations. This had led to emerging economies in the South becoming an important destination of R&D-related foreign direct investment (FDI), departing from their traditional role as low-cost production sites. Thus far, however, our understanding of this transformation process is limited. The purpose of this article is therefore to explore the process by which foreign MNEs’ low-value-adding operations in the South are transformed into high-value-adding R&D operations. Drawing on the current literature, we construct a framework of evolution consisting of four major waves of R&D internationalization and corresponding R&D objectives. To better understand how these waves have evolved over time, we focus on the South and trace the process of change using a single historical case study: AstraZeneca in China between 1993 and 2017. We find evidence of idiosyncratic location-bound conditions offering both opportunities and resources. The gradual development of these favourable conditions, along with AstraZeneca’s deepening local knowledge, triggered a transformation process in their operations in China. Our study thus offers important historical insights, which present a platform for future research providing more nuanced theoretical explanations of the four waves of R&D internationalization.
Original languageEnglish
JournalAsia Pacific Journal of Management
DOIs
Publication statusE-pub ahead of print - Jan 2019

Fingerprint

Pharmaceuticals
China
Internationalization
Innovation
Multinational enterprises
Transformation process
Resources
Innovation activities
Production cost
Foreign direct investment
Emerging economies
Destination
Local knowledge

Keywords

  • R&D internationalization
  • emerging economies
  • north and south
  • historical case study

Cite this

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title = "The internationalization of innovation towards the South: A historical case study of a global pharmaceutical corporation in China (1993–2017)",
abstract = "Intensified competition means that multinational enterprises (MNEs) are increasingly concerned with locating innovation activities in the most appropriate locations. This had led to emerging economies in the South becoming an important destination of R&D-related foreign direct investment (FDI), departing from their traditional role as low-cost production sites. Thus far, however, our understanding of this transformation process is limited. The purpose of this article is therefore to explore the process by which foreign MNEs’ low-value-adding operations in the South are transformed into high-value-adding R&D operations. Drawing on the current literature, we construct a framework of evolution consisting of four major waves of R&D internationalization and corresponding R&D objectives. To better understand how these waves have evolved over time, we focus on the South and trace the process of change using a single historical case study: AstraZeneca in China between 1993 and 2017. We find evidence of idiosyncratic location-bound conditions offering both opportunities and resources. The gradual development of these favourable conditions, along with AstraZeneca’s deepening local knowledge, triggered a transformation process in their operations in China. Our study thus offers important historical insights, which present a platform for future research providing more nuanced theoretical explanations of the four waves of R&D internationalization.",
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The internationalization of innovation towards the South : A historical case study of a global pharmaceutical corporation in China (1993–2017). / Zhao, Shasha; Tan, Hui; Papanastassiou, Marina; Harzing, Anne-wil.

In: Asia Pacific Journal of Management, 01.2019.

Research output: Contribution to journalArticleScientificpeer-review

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