What Determines Innovation Activity in Chinese State-owned Enterprises? The Role of Foreign Direct Investment

Sourafel Girma (), Yundan Gong and Holger Görg ()

World Development, 2009, vol. 37, issue 4, pages 866-873

Abstract: Summary We investigate whether inward foreign direct investment (FDI), either at the firm or industry level, has any impact on product innovation by Chinese state-owned enterprises (SOEs). We use a comprehensive firm-level panel data set of some 20,000 SOEs during 1999-2005. Our results show that foreign capital participation at the firm level is associated with higher innovative activity. Inward FDI in the sector, by contrast, has a negative effect on innovative activity in SOEs on average. However, there is a positive effect of sector-level FDI on SOEs that export, invest in human capital, or undertake R&D.

Keywords: innovation; FDI; state-owned; enterprises; spillovers; competition; China; Asia (search for similar items in EconPapers)
Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:eee:wdevel:v:37:y:2009:i:4:p:866-873

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