Lundin, Nannan () (Research Institute of Industrial Economics (IFN)) Sjöholm, Fredrik () (Research Institute of Industrial Economics (IFN)) He, Ping (National Bureau of Statistics of China) Qian, Jinchang (National Bureau of Statistics of China)
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FDI 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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Paper 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: Handle: RePEc:hhs:iuiwop:0708
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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 - - - Innovation and Invention: Processes and Incentives
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