U.S. R&D captive offshoring in Brazil, China and India, 1997‐2014

Abstract

In this paper, we depart from the fact that U.S. corporate R&D captive offshore is increasing. We notice an average increase rate of 15.9% per year (1997-2014) in emerging markets – Brazil, China and India – which is considerably higher than the U.S. corporate R&D captive offshore in ‘Triad’ countries (4.5% per year). An exploratory analysis of the recent U.S. inward R&D-related FDI in Brazil, China and India in undertaken and we throws some light on the fact that despite the increase of U.S.R&D captive offshore in Brazil, China and India, most R&D undertaken is directed to local adaptations and not directed to new product development. In other words, R&D captive offshore is focused mainly in activities devoted merely to adapting products to local reality, that is, ‘adaptive R&D’. To find elements to show that U.S. R&D captive offshore in Brazil, China and India is mainly devoted to ‘adaptive R&D’ we review recent empirical evidences presented in the literature and use secondary data available at the Bureau of Economic Analysis