Journal
INTERNATIONAL BUSINESS REVIEW
Volume 25, Issue 5, Pages 1010-1019Publisher
ELSEVIER
DOI: 10.1016/j.ibusrev.2016.01.008
Keywords
Outward FDI; Regional innovation; Absorptive capacity; Foreign presence; Competition intensity
Categories
Funding
- National Natural Science Foundation of China [71502056]
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Recent years have witnessed substantial outward foreign direct investment (OFDI) from many emerging economies. Should the governments of these economies encourage OFDI in order to promote domestic innovation? Much OFDI by emerging economy multinational enterprises (EMNEs) has been undertaken to acquire strategic assets overseas, but do these acquisitions bring innovation benefits at home? The empirical analysis presented in this paper considers the effects of OFDI on regional innovation performance, using a panel of Chinese provinces, and finds that OFDI has a very significant impact on domestic innovation. Furthermore, we also identify three contingent factors - absorptive capacity, foreign presence, and the competition intensity of the local market - that moderate the impact of OFDI on innovation performance. (C) 2016 Elsevier Ltd. All rights reserved.
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