Location choice of foreign direct investment in technical KIBS in China: impact of human capital and intellectual property rights protection

Shijie Li

Journal of Asian Business and Economic Studies, 2024, vol. 31, issue 2, 149-160

Abstract: Purpose - This study considers the “technology creation” characteristic of technical knowledge-intensive business services (T-KIBS) and examines how human capital and intellectual property rights (IPR) protection affect the location choice of foreign direct investment (FDI) in China for two types of T-KIBS: (1) information transmission, software and information technology (ICT) services and (2) scientific research and technology (SCI) services. Design/methodology/approach - Our empirical analysis is based on panel data on 22 Chinese provinces from 2009 to 2017. We use the generalized method of moments estimation for the regression analysis. Findings - FDI in ICT services prefers regions with high human capital, while FDI in SCI services favors regions with good IPR protection. Research limitations/implications - Future research could use more comprehensive data and qualitative interviews to enhance the findings. Practical implications - These findings provide a foundation for China’s future policy on attracting FDI into T-KIBS, especially in areas related to human capital and IPR protection. Originality/value - This study bridges the research gap on the FDI location choice of T-KIBS in China by clarifying the influences of human capital and IPR protection and providing theoretical support for the location choice of T-KIBS FDI.

Keywords: T-KIBS; FDI; Location choice; OLI paradigm; Human capital; IPR protection; F21; F23; O53 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jabesp:jabes-12-2022-0319

DOI: 10.1108/JABES-12-2022-0319

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