How do human capital and R&D structure facilitate FDI knowledge spillovers to local firm innovation? a panel threshold approach

Rui Guo (), Lutao Ning () and Kaihua Chen ()
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Rui Guo: University of Chinese Academy of Sciences
Lutao Ning: University of London
Kaihua Chen: Chinese Academy of Sciences

The Journal of Technology Transfer, 2022, vol. 47, issue 6, No 13, 1947 pages

Abstract: Abstract This paper examines how local firms’ structure of human capital and R&D strategies influence their absorption of FDI knowledge spillovers. Using a unique dataset of Chinese firms in Beijing Zhongguancun Science Park from 2009 to 2015, our panel endogenous threshold models confirm two thresholds for human capital diversity and one threshold for R&D diversity in facilitating FDI spillovers. When human capital diversity is below its second threshold, FDI presence positively influences local firms’ innovation performance; while above the second threshold, the FDI turns to an insignificant impact. Besides, when R&D diversity is below its single threshold, FDI spillovers are positively associated with local firms’ innovation; otherwise, the effect of FDI is insignificantly negative. Our findings highlight the importance of human capital and R&D structures in local firms’ absorptive capacity. Local organizations need to keep diversifying their human capital and R&D strategies to learn from FDI knowledge but avoid allocating their efforts evenly upon sub-categories within the two resources.

Keywords: Foreign direct investment; Innovation; Human capital; R&D diversity (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10961-021-09885-y

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