Foreign Firms and Indigenous Technology Development in the People's Republic of China
The People's Republic of China (PRC) is currently promoting indigenous technology development through support of Chinese firms and, arguably, by restricting operations of foreign multinational firms. This policy seems to overlook the impact of foreign firms on technology development in local fi...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
World Scientific Publishing
2013-09-01
|
| Series: | Asian Development Review |
| Subjects: | |
| Online Access: | https://www.mitpressjournals.org/doi/pdf/10.1162/ADEV_a_00015 |
| _version_ | 1818935834379812864 |
|---|---|
| author | Fredrik Sjöholm Nannan Lundin |
| author_facet | Fredrik Sjöholm Nannan Lundin |
| author_sort | Fredrik Sjöholm |
| collection | DOAJ |
| description | The People's Republic of China (PRC) is currently promoting indigenous technology development through support of Chinese firms and, arguably, by restricting operations of foreign multinational firms. This policy seems to overlook the impact of foreign firms on technology development in local firms. For instance, technology might leak out to local firms though spillovers. Moreover, competition from foreign firms might force local firms to engage in technology development. We examine the impact of foreign direct investment (FDI) on technology development in the PRC. We start by surveying a large and growing literature on FDI and spillovers in the country. Most previous studies find evidence of positive spillovers. We then continue to examine the effect of FDI on competition in the Chinese manufacturing sector and the effect of competition on firms’ research and development (R&D). Our analysis is conducted on a large dataset including all large- and medium-sized Chinese 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. |
| first_indexed | 2024-12-20T05:26:28Z |
| format | Article |
| id | doaj.art-0cce05c77f3346e998169b183bf89cea |
| institution | Directory Open Access Journal |
| issn | 0116-1105 1996-7241 |
| language | English |
| last_indexed | 2024-12-20T05:26:28Z |
| publishDate | 2013-09-01 |
| publisher | World Scientific Publishing |
| record_format | Article |
| series | Asian Development Review |
| spelling | doaj.art-0cce05c77f3346e998169b183bf89cea2022-12-21T19:51:52ZengWorld Scientific PublishingAsian Development Review0116-11051996-72412013-09-01302497510.1162/ADEV_a_00015ADEV_a_00015Foreign Firms and Indigenous Technology Development in the People's Republic of ChinaFredrik Sjöholm0Nannan Lundin1Fredrik Sjöholm is Professor at the Department of Economics, Lund University and the Research Institute of Industrial Economics.Nannan Lundin is Managing Director at Tekfors Ltd.The People's Republic of China (PRC) is currently promoting indigenous technology development through support of Chinese firms and, arguably, by restricting operations of foreign multinational firms. This policy seems to overlook the impact of foreign firms on technology development in local firms. For instance, technology might leak out to local firms though spillovers. Moreover, competition from foreign firms might force local firms to engage in technology development. We examine the impact of foreign direct investment (FDI) on technology development in the PRC. We start by surveying a large and growing literature on FDI and spillovers in the country. Most previous studies find evidence of positive spillovers. We then continue to examine the effect of FDI on competition in the Chinese manufacturing sector and the effect of competition on firms’ research and development (R&D). Our analysis is conducted on a large dataset including all large- and medium-sized Chinese 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.https://www.mitpressjournals.org/doi/pdf/10.1162/ADEV_a_00015People's Republic of ChinaFDIspilloverstechnologyR&D |
| spellingShingle | Fredrik Sjöholm Nannan Lundin Foreign Firms and Indigenous Technology Development in the People's Republic of China Asian Development Review People's Republic of China FDI spillovers technology R&D |
| title | Foreign Firms and Indigenous Technology Development in the People's Republic of China |
| title_full | Foreign Firms and Indigenous Technology Development in the People's Republic of China |
| title_fullStr | Foreign Firms and Indigenous Technology Development in the People's Republic of China |
| title_full_unstemmed | Foreign Firms and Indigenous Technology Development in the People's Republic of China |
| title_short | Foreign Firms and Indigenous Technology Development in the People's Republic of China |
| title_sort | foreign firms and indigenous technology development in the people s republic of china |
| topic | People's Republic of China FDI spillovers technology R&D |
| url | https://www.mitpressjournals.org/doi/pdf/10.1162/ADEV_a_00015 |
| work_keys_str_mv | AT fredriksjoholm foreignfirmsandindigenoustechnologydevelopmentinthepeoplesrepublicofchina AT nannanlundin foreignfirmsandindigenoustechnologydevelopmentinthepeoplesrepublicofchina |