英文摘要 |
The purpose of this paper is to examine whether a lower labor cost in the host country will negatively affect a multinational firm’s R&D investment. An imperfectly competitive market structure and a production function with labor and technology inputs are utilized in this paper. The main findings in this paper are as follows. (1) If labor and technology are complementary inputs, the multinational firm will increase its R&D investment as it invests outward. (2) If labor and technology are substitute inputs, the impact of outward direct investment on multinational firm’s R&D investment is ambiguous. It is shown that the lower the host country’s wage or the larger the market size, the more likely it is that the multinational firm’s R&D investment will decrease due to outward direct investment. (3) In the case that a host country’s firm also invests in R&D, its R&D investment will decrease while facing foreign direct investment as labor and technology are complementary. On the contrary, as labor and technology are substitutes, the host firm’s R&D investment may increase while facing foreign direct investment. |