ABSTRACT
Almost all the past studies on globalization of R&D relate to happenings within the industrialized world. Only a few studies (Reddy 1997 and 2000; UNCTAD 2005) have been carried out on the location of strategic R&D in developing countries by MNCs. Developing countries were considered to have a certain competitive advantage in manufacturing activities due to their low labor costs, but R&D continues to be viewed as being out of their capability. This study, on the other hand, deals with the new trend of locating strategic innovation activities in some developing countries, which are considered as emerging economies. Therefore it becomes relevant to begin by a brief review of some of the theories pertaining to internationalization of production. The reasons for this are twofold. First, internationalization of production is temporally and logically expected to take place prior to internationalization of R&D; 1 Second, the involvement of developing countries in international production activities is far greater than their involvement in international R&D activities. Hence, a few theories relating to internationalization of production are first analyzed to see whether they could be integrated with those relating to R&D, to arrive at a broader framework of the process of globalization.
