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Outward foreign direct investment and domestic innovation capabilities: evidence from China

journal contribution
posted on 2023-06-09, 02:59 authored by Jian Li, Roger StrangeRoger Strange, Lutao Ning, Dylan Sutherland
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.

History

Publication status

  • Published

Journal

International Business Review

ISSN

0969-5931

Publisher

Elsevier

Issue

5

Volume

25

Page range

1010-1019

Department affiliated with

  • Business and Management Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2016-09-20

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