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The moderating effect of foreign direct investment intensity on local firms' intangible resources investment and performance implications: A case from China

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  • Jiang, Crystal X.
  • Yang, Qin
  • Li, Sali
  • Wang, Yong
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    Abstract

    Foreign direct investment (FDI) has been known to generate positive externalities to increase the productivity and competitiveness of domestic industries through knowledge and technology spillover. This study focuses on the indirect effect of FDI by investigating whether FDI intensity benefits local firms by enhancing the local intellectual property rights (IPR) environment. We argue that due to the inadequate IPR environment in emerging economies, local firms' intangible resources investment can be negatively related to firm performance. Further, we suggest that FDI intensity can improve the local IPR environment, thereby enhancing the appropriability of local firms' intangible resources investment. We find empirical evidence to support our arguments by examining 70 semiconductor firms in China from 1999 to 2006, and we discuss the theoretical and practical implications of the impact of FDI intensity on the local IPR environment.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 17 (2011)
    Issue (Month): 4 ()
    Pages: 291-302

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    Handle: RePEc:eee:intman:v:17:y:2011:i:4:p:291-302

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    Related research

    Keywords: Intangible resources; Intellectual property; Foreign direct investment; Emerging economy; Regional institution;

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    Cited by:
    1. Denk, Nikola & Kaufmann, Lutz & Roesch, Jan-Frederik, 2012. "Liabilities of Foreignness Revisited: A Review of Contemporary Studies and Recommendations for Future Research," Journal of International Management, Elsevier, vol. 18(4), pages 322-334.
    2. Li, Dan & Miller, Stewart R. & Eden, Lorraine & Hitt, Michael A., 2012. "The Impact of Rule of Law on Market Value Creation for Local Alliance Partners in BRIC Countries," Journal of International Management, Elsevier, vol. 18(4), pages 305-321.

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