Do Multinationals' R&D Activities Stimulate Indigenous Entrepreneurship? Evidence from China's "Silicon Valley"
AbstractUsing a unique firm-level dataset from China's "Silicon Valley," we investigate how multinational enterprises (MNEs) affect local entrepreneurship and R&D activities upon entry. We find that R&D activities of MNEs in an industry stimulate entry of domestic firms into the same industry and enhance R&D activities of newly entering domestic firms. By contrast, MNEs' production activities or domestic firms' R&D activities do not have such effect. Since MNEs are technologically more advanced than domestic firms, our findings suggest that diffusion of MNEs' advanced knowledge to potential indigenous entrepreneurs through MNEs' R&D stimulates entry of domestic firms.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13618.
Date of creation: Nov 2007
Date of revision:
Publication status: published as Mariassunta Giannetti, Andrei Simonov. "Social Interactions and Entrepreneurial Activity," in Thomas Hellman and Scott Stern, editors, "Entrepreneurship: Strategy and Structure" Journal of Economics and Management Strategy 18(3), Fall 2009 (Blackwell Publishing) (2009)
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Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-12-01 (All new papers)
- NEP-CNA-2007-12-01 (China)
- NEP-ENT-2007-12-01 (Entrepreneurship)
- NEP-INO-2007-12-01 (Innovation)
- NEP-IPR-2007-12-01 (Intellectual Property Rights)
- NEP-KNM-2007-12-01 (Knowledge Management & Knowledge Economy)
- NEP-MIC-2007-12-01 (Microeconomics)
- NEP-TRA-2007-12-01 (Transition Economics)
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