Abstract: Establishing overseas R&D institution is an important method of realizing R&D internationalization as well as a part of OFDI. Based on the theory of R&D internationalization and theory of OFDI from emerging markets, this research identifies three driving patterns from two dimensions----capability of firms and governmental policies. Using the samples from Innovation oriented firms database, the empirical results imply that capabilities of firms are the main driving force to setting up overseas R&D institution; among the capabilities, tech-invention capability and tech-cooperation capability are the most significant whereas the absorbility is not. It concludes that, on the one hand, government is expected to offer great efforts to help firms with advantage of capabilities to process R&D internationalization; on the other hand, the absorbility should be enhanced, with firms taking technology searching and learning and cooperation as their objectives