Productivity Spillovers from Foreign Direct Investment: Firm-Level Evidence from China

Xu, Xinpeng; Sheng, Yu

doi:10.1016/j.worlddev.2011.05.006

Cited by 130 publications

(75 citation statements)

References 22 publications

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“…Much has been written about the positive impact of inward foreign direct investment (IFDI) on the innovation performance of host economies (Ben Hamida, 2013;Ben Hamida & Gugler, 2009;Buckley, et al, 2002;Dunning & Lundan, 2008;Fu, 2012;García, et al, 2013;Iwasaki & Tokunaga, 2014;Ouyang & Fu, 2012;Xu & Sheng, 2012). In contrast, very few studies have considered the impact of outward foreign direct investment (OFDI) on the innovation performance of home economies, especially in the context of investments made by multinational enterprises based in emerging economies (EMNEs) (Deng, 2007;Liu, et al, 2005;Xia, et al, 2014).…”

Section: Introductionmentioning

confidence: 99%

Outward foreign direct investment and domestic innovation performance: Evidence from China

Strange

Ning

et al. 2016

International Business Review

175

121

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Additional information:Use policyThe full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that:• a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.Please consult the full DRO policy for further details. Recent years have witnessed substantial outward foreign direct investment (OFDI) from many emerging economies. Should the governments of these economies encourage OFDI in order to promote domestic innovation? Much OFDI by emerging economy multinational enterprises (EMNEs) has been undertaken to acquire strategic assets overseas, but do these acquisitions bring innovation benefits at home? The empirical analysis presented in this paper considers the effects of OFDI on regional innovation performance, using a panel of Chinese provinces, and finds that OFDI has a very significant impact on domestic innovation. Furthermore, we also identify three contingent factors -absorptive capacity, foreign presence, and the competition intensity of the local market -that moderate the impact of OFDI on innovation performance. 1 IntroductionMuch has been written about the positive impact of inward foreign direct investment (IFDI) on the innovation performance of host economies (Ben Hamida, 2013;Ben Hamida & Gugler, 2009;Buckley, et al., 2002;Dunning & Lundan, 2008;Fu, 2012;García, et al., 2013;Iwasaki & Tokunaga, 2014;Ouyang & Fu, 2012;Xu & Sheng, 2012). In contrast, very few studies have considered the impact of outward foreign direct investment (OFDI) on the innovation performance of home economies, especially in the context of investments made by multinational enterprises based in emerging economies (EMNEs) (Deng, 2007;Liu, et al., 2005;Xia, et al., 2014). Yet China is predicted to exceed US$ 5 trillion US dollars by 2020 (He, et al., 2012).3 Furthermore, there is considerable evidence to suggest that many Chinese MNEs are active seekers of strategic assets (Chen & Young, 2010;Deng, 2012;Edamura, et al., 2014;Ning & Sutherland, 2012;Ramasamy, et al., 2012;Rugman & Li, 2007;Williamson & Yin, 2012)

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Section: Introductionmentioning

confidence: 99%

Outward foreign direct investment and domestic innovation performance: Evidence from China

Strange

Ning

et al. 2016

International Business Review

175

121

View full text Add to dashboard Cite

show abstract

“…The entry of a highly efficient MNE changes significantly the competition environment and market conditions for domestic firms -increase of competition on horizontal level is potentially off-set by higher demand for intermediate goods on the vertical level; at the same time, domestic firms can potentially benefit from productivity spillovers, which are externalities created by the presence of MNE in the market (Meyer and Sinani, 2009). Researchers assume that technologically more advanced MNE represents a positive example which domestic firms can follow by copying new technologies, by hiring workers or managers that have had experience in the foreign company, and so on (Xu and Sheng, 2012).…”

Section: Literature Reviewmentioning

confidence: 99%

Horizontal Crowding-Out Versus Vertical Synergies Under the Mne Presence

Hanousek¹,

Kočenda²,

Vozárová³

2017

Proceedings of the 7th Economics &Amp; Finance Conference, Tel Aviv

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“…Nonetheless, post-entry effects last longer and it is due to increased competitive characteristics of domestic cooperants and newly formed start-ups (Xu and Sheng 2012).…”

Section: Fig 1 General Characteristics On Investment Reform In Southmentioning

confidence: 99%

Cobb–Douglas production function on FDI in Southeast Europe

Apostolov

2016

Economic Structures

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Productivity Spillovers from Foreign Direct Investment: Firm-Level Evidence from China

Cited by 130 publications

References 22 publications

Outward foreign direct investment and domestic innovation performance: Evidence from China

Outward foreign direct investment and domestic innovation performance: Evidence from China

Horizontal Crowding-Out Versus Vertical Synergies Under the Mne Presence

Cobb–Douglas production function on FDI in Southeast Europe

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