 The local technology spillovers of multinational firmsRobin Kaiji Gong Journal of International Economics, 2023, vol. 144, issue C Abstract: This study examines how innovation by U.S. multinational firms affects the productivity of domestic Chinese firms in the same counties as the U.S. subsidiaries. After manually matching U.S. multinational firms with their manufacturing subsidiaries in China, I use citation-weighted patent stock to measure U.S.-produced external knowledge in Chinese counties and employ an instrumental variable strategy based on U.S. R&D tax credit policies to address potential endogeneity concerns. Findings suggest that innovation by U.S. multinational firms improves the productivity of domestic Chinese firms co-located with their subsidiaries, indicating a local technology spillover effect. Domestic firms with high-wage workers, high innovation capacity, and private ownership are better equipped to absorb these spillovers. In addition, domestic firms in industries with closer technological ties to U.S. multinational firms benefit more from their innovation, suggesting that technological proximity amplifies the spillover effect. Keywords: FDI; Technology spillovers; Patents; Productivity (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:144:y:2023:i:c:s0022199623000764 DOI: 10.1016/j.jinteco.2023.103790 Access Statistics for this article Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and RodrÃguez-Clare, Andrés More articles in Journal of International Economics from Elsevier |
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