FDI, Market Structure and R&D Investments in China
AbstractFDI can be an important channel for developing countries’ ability to get access to new technology. The impact of FDI on domestically-owned firms’ technology development is less examined but it is frequently argued that technology externalities or demonstration effects could have a positive impact. Another and so far little examined effect of FDI on technology development in domestically-owned firms is through the impact on competition. We examine the effect of FDI on competition in the Chinese manufacturing sector and the effect of competition on firms’ R&D. Our analysis is conducted on a large dataset including all Chinese large and medium sized 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.
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Bibliographic InfoPaper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 708.
Length: 30 pages
Date of creation: 21 Jun 2007
Date of revision:
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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
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More information through EDIRC
China; FDI; Competition; R&D;
Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-06-30 (All new papers)
- NEP-CNA-2007-06-30 (China)
- NEP-COM-2007-06-30 (Industrial Competition)
- NEP-DEV-2007-06-30 (Development)
- NEP-FDG-2007-06-30 (Financial Development & Growth)
- NEP-INO-2007-06-30 (Innovation)
- NEP-MIC-2007-06-30 (Microeconomics)
- NEP-SEA-2007-06-30 (South East Asia)
- NEP-TID-2007-06-30 (Technology & Industrial Dynamics)
- NEP-TRA-2007-06-30 (Transition Economics)
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