Does inward foreign direct investment improve the innovative performance of local firms?

García, Francisco Javier Puente; Jin, Byungchae; Salomon, Robert

doi:10.1016/j.respol.2012.06.005

Cited by 159 publications

(134 citation statements)

References 46 publications

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“…International openness and inward FDI can strengthen a region's economy and accelerate technological catch-up (Todtling and Trippl, 2005). It can also stimulate innovation through spillovers, demonstration effects and competition (García et al, 2013;Kafouros and Buckley, 2008). As multinational enterprises (MNEs) enter the host market, they create relationships with academic institutions to increase the understanding of the market and reduce transaction costs (Chan et al, 2010).…”

Section: Effects Of International Openness On Academic Collaborationsmentioning

confidence: 99%

Academic collaborations and firm innovation performance in China: The role of region-specific institutions

et al. 2015

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Although prior research has highlighted the importance of academic collaborations in enhancing firms' innovation performance, it has largely focused on developed countries. As a result, it remains unclear how academic collaborations influence innovation in emerging countries, which differ fundamentally in their institutional environment. We contribute to this literature by examining how collaborations with universities and research institutes influence the ability of Chinese emerging market enterprises (EMEs) to develop innovations. Our analysis challenges the assumption of institutional homogeneity within a given country, showing that institutions evolve in different ways across sub-national Chinese regions. This uneven institutional evolution affects the enforcement of intellectual property rights (IPR), the level of international openness, the quality of universities and research institutes across regions and, consequently, how much Chinese EMEs benefit from academic collaborations.Our findings reveal that sub-national institutional variations have a profound impact on the relationship between academic collaborations and firms' innovation performance, show that some established assumptions are not valid in emerging countries such as China, and offer insights into how EMEs enhance their innovation performance.

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Section: Effects Of International Openness On Academic Collaborationsmentioning

confidence: 99%

Academic collaborations and firm innovation performance in China: The role of region-specific institutions

et al. 2015

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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

172

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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“…Moreover, the presence of FDI can have a 'crowding-out effect', as MNEs with advanced business acumen can outcompete domestic firms. These companies can offer superior products and services and higher pay, thereby drawing customers, investors, suppliers and skilled employees away from domestic firms (García et al 2013;Tian 2006). Domestic firms may suffer from reduced profitability, leaving them with little to invest in modern equipment and operating practices.…”

Section: Fdi and Environmental Spilloversmentioning

confidence: 99%

Does FDI Bring Environmental Knowledge Spillovers to Developing Countries? The Role of the Local Industrial Structure

Ning

Wang

2017

Environ Resource Econ

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This paper examines the environmental knowledge externalities of FDI within and across cities in an emerging economy context. It argues that the extent of these environmental externalities is contingent upon local industrial agglomeration. Using a panel dataset of 280 Chinese prefectural cities from 2003 to 2012, we employ a spatial economic approach. Although limited to evidence from soot and SO 2 pollutants, our results suggest that FDI brings overall positive environmental knowledge externalities to a region, and also spillovers to nearby regions. Specialised cities may lock into a particular technological path, attenuating the absorption and diffusion of a variety of FDI environmental knowledge. Conversely, diversified cities promote cross-fertilisation of environmental knowledge and mitigate local pollution intensity at the aggregated city level. This study adds to the literature by highlighting the importance of considering both the spatiality of FDI and industrial structure in understanding FDI environmental knowledge spillovers.

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Does inward foreign direct investment improve the innovative performance of local firms?

Cited by 159 publications

References 46 publications

Academic collaborations and firm innovation performance in China: The role of region-specific institutions

Academic collaborations and firm innovation performance in China: The role of region-specific institutions

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

Does FDI Bring Environmental Knowledge Spillovers to Developing Countries? The Role of the Local Industrial Structure

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