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Do Multinationals' R&D Activities Stimulate Indigenous Entrepreneurship? Evidence from China's "Silicon Valley"

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  • Hongbin Cai
  • Yasuyuki Todo
  • Li-An Zhou

Abstract

Using 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 Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13618.

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Date of creation: Nov 2007
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Publication status: published as Social Interactions and Entrepreneurial Activity , Mariassunta Giannetti, Andrei Simonov. in Entrepreneurship: Strategy and Structure , Hellmann and Stern. 2009
Handle: RePEc:nbr:nberwo:13618

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Cited by:
  1. Zheng, Jianghuai & Gao, Yanyan & Hu, Xiaowen, 2008. "企业“扎堆”、技术升级与经济绩效 ——对中国开发区产业集聚的性质及其变迁的实证分析
    [Firm Concentration, Technology Promotion and Economic Performance: An Empi
    ," MPRA Paper 8917, University Library of Munich, Germany.
  2. Zheng, Jianghuai & Gao, Yanyan, 2009. "The nature of economic development zones in China:an empirical study based on data from the Yangtze River Delta," MPRA Paper 33141, University Library of Munich, Germany.
  3. Zhang, Ying & Duysters, Geert, 2010. "Entrepreneurship Development and the Role of Economic Transition in Entrepreneurial Activities in China," MERIT Working Papers, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) 036, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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