Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You and Your Team.

Learn More →

Spillover effect of FDI on China's knowledge creation

Spillover effect of FDI on China's knowledge creation Purpose – The purpose of this paper is to examine if the knowledge spillover effect from foreign direct investment (FDI) inflow exists as well as its possible channels in China, and makes some policy suggestions. Design/methodology/approach – Based on the literature review, the paper sets a panel data model to empirically examine if the knowledge spillover effect of FDI inflow exists in China, using data from 28 manufacturing industries during 2001‐2005. Findings – The empirical results show that FDI played a positive role in China's knowledge creation and management in the sample period. At the same time, the demonstration effect and labor mobility effect served as the channels to yield beneficial results while the competition effect produced undesirable impact. However, the effect of these three channels on China's knowledge creation was very weak. Instead, the knowledge creation in China was still dependent on the input of R&D by domestic firms. Research limitations/implications – Owing to the data limitation, this paper only adopted data from large and medium enterprises to examine the spillover effect of FDI on the knowledge creation, and thus the conclusions may not be applicable to small enterprises. Originality/value – Most of the present studies only examined the existence of knowledge spillover effect, without investigating econometrically its channels. Using the latest industry‐level panel data, this paper examines both the existence of knowledge spillover and its main spillover channels empirically. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Chinese Management Studies Emerald Publishing

Spillover effect of FDI on China's knowledge creation

Chinese Management Studies , Volume 2 (2): 11 – Jun 13, 2008

Loading next page...
 
/lp/emerald-publishing/spillover-effect-of-fdi-on-china-s-knowledge-creation-Y2QSaA9jMP
Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
1750-614X
DOI
10.1108/17506140810882225
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to examine if the knowledge spillover effect from foreign direct investment (FDI) inflow exists as well as its possible channels in China, and makes some policy suggestions. Design/methodology/approach – Based on the literature review, the paper sets a panel data model to empirically examine if the knowledge spillover effect of FDI inflow exists in China, using data from 28 manufacturing industries during 2001‐2005. Findings – The empirical results show that FDI played a positive role in China's knowledge creation and management in the sample period. At the same time, the demonstration effect and labor mobility effect served as the channels to yield beneficial results while the competition effect produced undesirable impact. However, the effect of these three channels on China's knowledge creation was very weak. Instead, the knowledge creation in China was still dependent on the input of R&D by domestic firms. Research limitations/implications – Owing to the data limitation, this paper only adopted data from large and medium enterprises to examine the spillover effect of FDI on the knowledge creation, and thus the conclusions may not be applicable to small enterprises. Originality/value – Most of the present studies only examined the existence of knowledge spillover effect, without investigating econometrically its channels. Using the latest industry‐level panel data, this paper examines both the existence of knowledge spillover and its main spillover channels empirically.

Journal

Chinese Management StudiesEmerald Publishing

Published: Jun 13, 2008

Keywords: China; International investments; Knowledge economy; Knowledge creation; Econometrics

References