Journal
JOURNAL OF TECHNOLOGY TRANSFER
Volume 47, Issue 6, Pages 1921-1947Publisher
SPRINGER
DOI: 10.1007/s10961-021-09885-y
Keywords
Foreign direct investment; Innovation; Human capital; R&D diversity
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Funding
- National Natural Science Foundation of China [72025403, 71874179]
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This paper examines how the structure of human capital and R&D strategies of local firms affect their absorption of FDI knowledge spillovers. The study reveals that when human capital and R&D diversity are below specific thresholds, FDI has a positive impact on innovation for local firms, otherwise it could turn negative.
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.
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