Research on the Reverse Technology Spillover Effect from China’s CVC Overseas Investments

Xiaoli Wang () and Yi Tan
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Xiaoli Wang: School of Management, Marist University, Poughkeepsie, NY 12601, USA
Yi Tan: Antai Collge of Economics & Management, Shanghai Jiaotong University, Shanghai 200030, China

IJFS, 2025, vol. 13, issue 2, 1-22

Abstract: China’s corporate venture capital (CVC) overseas investment began in the late 20th century and has expanded significantly over the years. By 2021, more than 265 Chinese institutions and companies had engaged in cross-border investments, contributing over USD 100 billion. These investments present a unique opportunity to examine the reverse technology spillover effect on China’s technological development. Using a Difference-in-Differences model and regression analysis, we investigate whether China’s CVC overseas investments drive technological progress. Our findings reveal three key insights: (1) these investments have a positive impact on China’s technological advancement, (2) the effect is stronger when the host country has a higher level of technology, and (3) larger investment amounts amplify the impact. This research not only highlights the transformative potential of cross-border CVC investments but also demonstrates how enterprises can leverage reverse innovation spillovers to accelerate China’s technological progress. Additionally, we introduce a novel approach to studying this phenomenon, contributing to the existing scholarship on global innovation dynamics.

Keywords: corporate venture capital (CVC); overseas investment; reverse technology spillovers; patents; technology level (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2025
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