| Summary/Abstract |
Using an internationally linked patent database, this paper compares the types of R&D activities undertaken by multinationals in China by home country and industry. In China, multinationals recently began investing in R&D, mainly in the areas of product and manufacturing process development. However, US firms, which are the most actively invested in R&D, are involved in some technology-driven R&D activities; European firms are inclined toward market-driven R&D, while Japanese firms, which lag behind the other two, focus on production-driven R&D. This pattern may be related to the relative competitiveness of each country: Japanese firms are strong in electronics and automobiles, where production process improvement is important, while US firms flourish in science-based industries, such as pharmaceuticals and software, where interacting with the local science base is a critical factor.
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