Factors affecting R&D collaboration of MNEs with their local partner firms: case study of Ford Motor Company and Otosan

In the last decades, R&D strategies and international location decisions of MNEs have changed substantially as they increasingly set up R&D facilities outside their home country in some developing countries where the R&D activities go beyond adaptation for local markets. This research explores the factors affecting R&D collaboration of MNEs and their local partner firms through a case study carried out in Turkey. The data collection method is face-to-face in-depth interviews with automotive companies’ R&D managers and engineers. Findings showed that Ford Motor Co. and Otosan's R&D collaboration is based upon a long partnership in manufacturing during which R&D capability and absorptive capacity of Otosan gradually increased. On the other hand, low labour costs, high government incentives for R&D, appropriate infrastructure to carry out R&D activities in Turkey as well as skilled and well educated R&D staff are important factors for Ford. Ford and Otosan's R&D collaboration is a success story of how two production partner firms could collaborate in R&D activities.