Unleashing the impact of outward foreign direct investment in China’s high-end equipment manufacturing industry on technological innovation: evidence from China

Wei Wei, Qiyuan Li, Shuyu Zheng and Ruige Sun

Post-Communist Economies, 2025, vol. 37, issue 5, 481-498

Abstract: This study examines how outward foreign direct investment influences technological innovation in China’s high-end equipment manufacturing industry from 2012 to 2021, focusing on the role of intellectual property rights protection. The results show that OFDI has a significant positive impact on technological innovation, with stronger effects under higher IPR protection. Threshold regression analysis reveals that when IPR protection is weak, OFDI may hinder innovation, but as IPR protection crosses a certain level, the relationship turns positive and strengthens further at higher thresholds. Heterogeneity analysis shows that, from the perspective of technological attributes, the positive impact of OFDI on technological innovation in the high-tech manufacturing industry is more significant than in the non-high-tech manufacturing industry. From the perspective of competitive intensity, the impact of OFDI on technological innovation in regulated industries is not significant, whereas it is significant in competitive industries. These findings highlight the importance of strengthening IPR regimes to maximize OFDI-driven innovation, particularly in high-tech and competitive sectors.

Date: 2025
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DOI: 10.1080/14631377.2025.2478356

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