This paper examines patterns and determinants of overseas R&D expenditure of MNEs, with emphasis on the East Asian experience, using a new panel dataset relating to U.S.-based manufacturing MNEs over the period 1990-2001. It is found that inter-country differences in R&D intensity of operation of US MNE affiliates are fundamentally determined by the domestic market size, overall R&D capability and cost of hiring R&D personnel.
Link
http://hi-stat.ier.hit-u.ac.jp/research/discussion/2005/pdf/D05-117.pdf