Globalisation of R&D by TNC subsidiaries: The case of South-East Asian countries

This study examines the extent to which parent transnational corporations (TNCs) have decentralised their roles in the global market by utilising the most efficient subsidiaries in host countries, and addresses the evolution of subsidiaries roles over time. To consider the subsidiary evolution process, the article focuses on R&D activities among Japanese TNC subsidiaries in South-East Asian countries. By reviewing different models of subsidiary evolution, the article seeks to investigate these processes empirically and theoretically by closely analysing data collected over a number of years. Japanese TNC subsidiaries in Singapore, Malaysia and Thailand have long been involved in manufacturing activities; using empirical data, this study finds that the decentralisation and evolution of R&D activities tends toward a degree of autonomy within a TNC group. The results suggest that once subsidiaries become competent, their R&D and production networking becomes further enhanced through their activities in host countries, for example from product development to applied research, which thus results in a higher autonomy level. Our findings suggest that the evolution of R&D laboratories roles is influenced by a subsidiary's competence level, which is also affected by its TNC group.