Will the International Scope of Multinationals Change?

The last six or seven years a new trend in R&D location literature can be identified: more and more multinational corporations (MNCs) headquartered in developed countries decided to locate their R&D centers in developing countries. Despite of this trend in the R&D location literature, there are important reasons to believe that this rapid growth in global innovation has come to an end. The primary reason for this change seems to be the current financial crisis. However, to the best of the authors knowledge, there has not been any previous research that has investigated the relation between the financial crisis and this decrease in offshoring of R&D centers to developing countries. This research is a first attempt to fill this gap in the literature as it focuses on the negative effect of the current financial crisis on the offshoring of R&D. The results indicate that there is indeed a strong decrease in the offshoring of R&D centers by MNCs headquartered in developed countries to developing countries. Moreover, a decrease of outbound R&D for developed countries and therefore consecutively also a decrease of inbound R&D for developing countries can be identified.