An analysis on the causes of the internalization of enterprise research and development

With the increasing competition, the enterprises´ pressure and dynamic for technological competition become more and more direct and intense, and the enterprises have to strengthen the internalization of research and development (R&D for short) continuously to improve their technological competition ability. The author analyzes the causes of the phenomenon that China´s enterprises strengthen the internalization of R&D. The current existing condition such as the improvement in the protection system of intellectual property, the forward push of the market competition and the enhancement of industrial concentration, forces enterprises to build their own R&D institutions and enhance their capability as well. The author also theoretically explain the internalization of R&D of China´s enterprises from the transaction cost theory, and finally proposes to push the internalization of our enterprises´ R&D further by establishing the enterprises´ dominant position in China´s R&D activities and forming a system to evaluate the R&D of China´s enterprises.