R&D internationalization and innovation performance of Chinese enterprises: The mediating role of returnees and foreign professionals

Abstract

AbstractIn the innovation‐driven economy of the 21st century, the emerging global innovation landscape is one of geographically concentrated centers of excellence in developed markets, which are embedded in a global network carrying, collaborating and sharing knowledge. Without top‐level innovation resources in the home country, how do emerging market multinational enterprises (EMMNEs) learn to innovate on global markets? This paper takes Chinese enterprises operating in the ICT industry from Shanghai Zhangjiang as example, to explore whether EMMNEs can promote their innovation performances via R&D internationalization to acquire external knowledge and technology resources abroad, by the establishment of international technology alliances, cross‐border mergers and acquisitions along with greenfield investment in overseas research institutions, in relation to their hiring returnees and foreign professionals. The empirical results reveal that R&D internationalization is positively related to enterprises’ innovation performance, and that the relationship is fully mediated by returnees, with the effect also being partially mediated by foreign professionals. Our research unpacks the different mediating effects of returnees and foreign professionals on the gains of sourcing external knowledge, providing some implications for enterprises’ innovation practices.