The impact of China’s national technology agenda on MNEs’ strategies with Sino-foreign R&D linkages

We investigate how China’s national technology agenda influences multinational enterprises (MNEs)’ strategies for deploying in-house Sino-foreign research and development (R&D) linkages in the increasingly bifurcated world. We argue that both MNEs and countries emphasize knowledge creation and protection, but their interests converge sometimes and diverge at other times. When China makes its national technology agenda and puts strategic importance to some technology areas, MNEs with related technology leadership increase their deployment of in-house Sino-foreign R&D linkages in such areas. However, China’s technological enhancement in those strategically important technology areas would weaken such positive relationship. The above arguments are supported by our empirical analysis of 46,661 Sino-foreign R&D linkages made by 508 MNEs between 2016 and 2022. Further analysis shows that only the US MNEs reduced their in-house Sino-foreign R&D linkages when they have technology leadership in technology areas where China has enhanced technological competence and attached strategic importance. The findings contribute to the research on global innovation strategy in the context of geopolitical tensions, showing bifurcation between major economies results in suboptimal R&D outcome.