FDI, Market Structure and R&D Investments in China

Nannan Lundin (), Fredrik Sjöholm, Ping He and Jinchang Qian
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Ping He: National Bureau of Statistics of China
Jinchang Qian: National Bureau of Statistics of China

No 708, Working Paper Series from Research Institute of Industrial Economics

Abstract: FDI can be an important channel for developing countries’ ability to get access to new technology. The impact of FDI on domestically-owned firms’ technology development is less examined but it is frequently argued that technology externalities or demonstration effects could have a positive impact. Another and so far little examined effect of FDI on technology development in domestically-owned firms is through the impact on competition. We examine the effect of FDI on competition in the Chinese manufacturing sector and the effect of competition on firms’ R&D. Our analysis is conducted on a large dataset including all Chinese large and medium sized firms over the period 1998-2004. Our results show that FDI increases competition but there are no strong indications of competition affecting investments in R&D.

Keywords: China; FDI; Competition; R&D (search for similar items in EconPapers)
JEL-codes: F23 L11 O31 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2007-06-21
New Economics Papers: this item is included in nep-cna, nep-com, nep-dev, nep-fdg, nep-ino, nep-mic, nep-sea, nep-tid and nep-tra
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0708

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