Horizontal FDI and Internal R&D of Local Firms in Emerging Economies: A Coopetition Perspective

Jun Xia, Qian Cecilia Gu, Marshall S. Jiang and Zhouyu Lin

Management and Organization Review, 2023, vol. 19, issue 5, 981-1004

Abstract: This study advances a coopetition perspective to argue that an intangibility gap, defined as the difference in intangible asset intensity between industry-frontier foreign firms and local firms, generates both competitive threats and cooperative opportunities for local firms. Thus, an intangibility gap may affect local firms’ internal research and development (R&D) efforts beyond a linear, catching-up way of thinking. Using a sample of manufacturing firms in China, we find that intangibility gap has an inverted U-shaped relationship with the internal R&D intensity of local firms such that a moderate intangibility gap is more likely to stimulate local firms’ R&D than a small or large intangibility gap. Moreover, the results show that export intensity and state ownership of local firms serve as two boundary conditions under which the inverted U-shaped relationship becomes less and more pronounced, respectively.

Date: 2023
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