 Foreign Direct Investment, Absorptive Capacity and Regional Innovation Capabilities: Evidence from ChinaOxford Development Studies, 2008, vol. 36, issue 1, 89-110 Abstract: Innovation has widely been regarded as one of the main drivers of economic growth in the knowledge economy. This paper investigates the impact of foreign direct investment (FDI) on the development of regional innovation capabilities using a panel data set from China. It finds that FDI has a significant positive impact on the overall regional innovation capacity. FDI intensity is also positively associated with innovation efficiency in the host region. The strength of this positive effect depends, however, on the availability of the absorptive capacity and the presence of innovation-complementary assets in the host region. The increased regional innovation and technological capabilities have contributed further to regional economic growth in China's coastal regions but not in the inland regions. It concludes that the type and quality of FDI inflows and the strength of local absorptive capacity and complementary assets in the host regions are crucial for FDI to serve as a driver of knowledge-based development. Policy implications are discussed. Date: 2008 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:oxdevs:v:36:y:2008:i:1:p:89-110 Ordering information: This journal article can be ordered from DOI: 10.1080/13600810701848193 Access Statistics for this article Oxford Development Studies is currently edited by Jo Boyce and Frances Stewart More articles in Oxford Development Studies from Taylor & Francis Journals |
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