The Globalization of Japanese R&D: The Economic Geography of Japanese R&D Investment in the United States

This paper explores the globalization of R&D by Japanese industry, examining the scope and nature of Japanese R&D in the United States, the globalization strategies of Japanese firms, and the determinants of the location of offshore R&D facilities. A comprehensive dataset on Japanese R&D in the United States was developed, and field research and survey research were conducted with Japanese firms and R&D laboratories. The findings indicate that Japanese corporations operated 174 stand-alone R&D laboratories in the United States and spent more than $1 billion on U.S.-based R&D in 1990. Japanese R&D investment in the United States is geographically concentrated around leading technology centers and in the Midwest transplant automotive corridor. A large share of Japanese R&D facilities are product development facilities that customize products for the U.S. market and provide technical support to manufacturing. A subset of these facilities, particularly in the automotive sector, is located at or near existing transplant factories. A smaller number of Japanese R&D investments are scientifically oriented basic research facilities, located near major U.S. research centers to secure access to new sources of scientific and technical talent. The findings thus suggest that the globalization of R&D by Japanese corporations is the result of: (1) the globalization of innovation and production, (2) the emergence of new centers of technological innovation and knowledge-intensive production, and (3) the increasing importance of interaction between the sites of innovation and production.