More jobs for our foes? Global R&D strategy in the age of techno-nationalism

Abstract

In light of rising techno-nationalism, MNEs (multinational enterprises) face heightened scrutiny over the legitimacy of their cross-border R&D investments, especially in host countries with strained diplomatic relations with the MNEs' home countries. Drawing from a realism-based international relations perspective and legitimacy theory, our study explores the effect of diplomatic relations between home and host countries on MNEs' global R&D strategy. We find that, in the face of adversarial diplomatic relations, MNEs increase their commitment to R&D-related jobs as a strategy to gain legitimacy. This finding extends the R&D internationalization literature by informing how MNEs navigate their efforts for legitimacy of their global R&D investments in an era marked by techno-nationalism.