Globalization, Foreign Direct Investment, and Regional Innovation in China

Yi Zhang () and Hein Roelfsema ()
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Yi Zhang: Jinhe Center for Economic Research, Xi'an Jiaotong University, No. 28, Xianning West Road, Xi'an, Shaanxi, 710049, P. R. China

Journal of International Commerce, Economics and Policy (JICEP), 2014, vol. 05, issue 03, 1-26

Abstract: This paper explores the connection between the external opening of China and differences in innovation across Chinese regions. For the period 1995–2010, we find that regions that attract inward foreign direct investment (FDI) and exports have become more innovative. Further, we show a U-shaped relation between globalization, regional income levels, and innovation, where both the lower middle-income and the most advanced regions gain from globalization in terms of increased innovation. The higher middle-income regions gain little from globalization in terms of innovation. We provide evidence that differences in ownership structures of foreign investments and outsourcing drive the results.

Keywords: Globalization; innovation; regional development; China; F14; F21; F23; O33; O53 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (4)

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DOI: 10.1142/S1793993314400079

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