IDEAS home Printed from https://ideas.repec.org/a/gam/jijfss/v13y2025i2p63-d1633984.html
   My bibliography  Save this article

Research on the Reverse Technology Spillover Effect from China’s CVC Overseas Investments

Author

Listed:
  • Xiaoli Wang

    (School of Management, Marist University, Poughkeepsie, NY 12601, USA)

  • Yi Tan

    (Antai Collge of Economics & Management, Shanghai Jiaotong University, Shanghai 200030, China)

Abstract

China’s corporate venture capital (CVC) overseas investment began in the late 20th century and has expanded significantly over the years. By 2021, more than 265 Chinese institutions and companies had engaged in cross-border investments, contributing over USD 100 billion. These investments present a unique opportunity to examine the reverse technology spillover effect on China’s technological development. Using a Difference-in-Differences model and regression analysis, we investigate whether China’s CVC overseas investments drive technological progress. Our findings reveal three key insights: (1) these investments have a positive impact on China’s technological advancement, (2) the effect is stronger when the host country has a higher level of technology, and (3) larger investment amounts amplify the impact. This research not only highlights the transformative potential of cross-border CVC investments but also demonstrates how enterprises can leverage reverse innovation spillovers to accelerate China’s technological progress. Additionally, we introduce a novel approach to studying this phenomenon, contributing to the existing scholarship on global innovation dynamics.

Suggested Citation

  • Xiaoli Wang & Yi Tan, 2025. "Research on the Reverse Technology Spillover Effect from China’s CVC Overseas Investments," IJFS, MDPI, vol. 13(2), pages 1-22, April.
    • Handle: RePEc:gam:jijfss:v:13:y:2025:i:2:p:63-:d:1633984
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7072/13/2/63/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7072/13/2/63/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gary Dushnitsky & J. Myles Shaver, 2009. "Limitations to interorganizational knowledge acquisition: the paradox of corporate venture capital," Strategic Management Journal, Wiley Blackwell, vol. 30(10), pages 1045-1064, October.
    2. Shi Li & Long Zhao & Hao Shen, 2021. "Foreign direct investment and institutional environment: the impact of bilateral investment treaties," Applied Economics, Taylor & Francis Journals, vol. 53(30), pages 3535-3548, June.
    3. Akcigit, Ufuk & Ates, Sina T. & Lerner, Josh & Townsend, Richard R. & Zhestkova, Yulia, 2024. "Fencing off Silicon Valley: Cross-border venture capital and technology spillovers," Journal of Monetary Economics, Elsevier, vol. 141(C), pages 14-39.
    4. Basu, Sandip & Phelps, Corey & Kotha, Suresh, 2011. "Towards understanding who makes corporate venture capital investments and why," Journal of Business Venturing, Elsevier, vol. 26(2), pages 153-171, March.
    5. Yamawaki, Hideki, 1994. "International Competitiveness and the Choice of Entry Mode: Japanese Multinationals in U.S. and European Manufacturing Industries," Working Paper Series 424, Research Institute of Industrial Economics.
    6. Chen, Victor Zitian & Li, Jing & Shapiro, Daniel M., 2012. "International reverse spillover effects on parent firms: Evidences from emerging-market MNEs in developed markets," European Management Journal, Elsevier, vol. 30(3), pages 204-218.
    7. Luiz R. de Mello Jr., 1997. "Foreign Direct Investment in Developing Countries: A Selective Survey," Studies in Economics 9701, School of Economics, University of Kent.
    8. Hu, Feng & Xi, Xun & Zhang, Yueyue, 2021. "Influencing mechanism of reverse knowledge spillover on investment enterprises’ technological progress: An empirical examination of Chinese firms," Technological Forecasting and Social Change, Elsevier, vol. 169(C).
    9. Corey C. Phelps & Sandip Basu & Suresh Kotha, 2011. "Towards understanding who makes corporate venture capital investments and why," Post-Print hal-00575634, HAL.
    10. Luiz de Mello, 1997. "Foreign direct investment in developing countries and growth: A selective survey," Journal of Development Studies, Taylor & Francis Journals, vol. 34(1), pages 1-34.
    11. Yan Li & Xiaohan Zhang & Chenxin Jin & Qingbo Huang, 2022. "The Influence of Reverse Technology Spillover of Outward Foreign Direct Investment on Green Total Factor Productivity in China’s Manufacturing Industry," Sustainability, MDPI, vol. 14(24), pages 1-17, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Benkraiem, Ramzi & Boubaker, Sabri & Brinette, Souad & Khemiri, Sabrina, 2021. "Board feminization and innovation through corporate venture capital investments: The moderating effects of independence and management skills," Technological Forecasting and Social Change, Elsevier, vol. 163(C).
    2. Marco Ceccagnoli & Matthew J. Higgins & Hyunsung D. Kang, 2018. "Corporate venture capital as a real option in the markets for technology," Strategic Management Journal, Wiley Blackwell, vol. 39(13), pages 3355-3381, December.
    3. Schulze, Arndt & Dada, Olufunmilola (Lola), 2025. "The effect of corporate venturing on knowledge acquisition and performance in small and medium-sized firms in Germany," Journal of Business Research, Elsevier, vol. 188(C).
    4. Wadhwa, Anu & Phelps, Corey & Kotha, Suresh, 2016. "Corporate venture capital portfolios and firm innovation," Journal of Business Venturing, Elsevier, vol. 31(1), pages 95-112.
    5. Lin, Jun-You, 2020. "What affects new venture firm’s innovation more in corporate venture capital?," European Management Journal, Elsevier, vol. 38(4), pages 646-660.
    6. Jeon, Euiju & Maula, Markku, 2022. "Progress toward understanding tensions in corporate venture capital: A systematic review," Journal of Business Venturing, Elsevier, vol. 37(4).
    7. Varkey K. Titus Jr. & Brian S. Anderson, 2018. "Firm Structure and Environment as Contingencies to the Corporate Venture Capital-Parent Firm Value Relationship," Entrepreneurship Theory and Practice, , vol. 42(3), pages 498-522, May.
    8. Patrick Röhm, 2018. "Exploring the landscape of corporate venture capital: a systematic review of the entrepreneurial and finance literature," Management Review Quarterly, Springer, vol. 68(3), pages 279-319, August.
    9. Kwon, Sungjoung & Manna, Nomalia, 2025. "Corporate investments in startups: CVC unit vs. direct investment," Journal of Banking & Finance, Elsevier, vol. 175(C).
    10. Kang Hyunsung D, 2018. "A Start-Up’s R&D Stages and the Evolution of Financing Sources: Evidence from the Biotechnology Industry," Entrepreneurship Research Journal, De Gruyter, vol. 8(3), pages 1-19, July.
    11. Shuwaikh, Fatima & Dubocage, Emmanuelle, 2022. "Access to the Corporate Investors' Complementary Resources: A Leverage for Innovation in Biotech Venture Capital-Backed Companies," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    12. Dushnitsky, Gary & Yu, Lei, 2022. "Why do incumbents fund startups? A study of the antecedents of corporate venture capital in China," Research Policy, Elsevier, vol. 51(3).
    13. Yongwook Paik & Heejin Woo, 2017. "The Effects of Corporate Venture Capital, Founder Incumbency, and Their Interaction on Entrepreneurial Firms’ R&D Investment Strategies," Organization Science, INFORMS, vol. 28(4), pages 670-689, August.
    14. Lucyna Kornecki & Vedapuri Raghavan, 2011. "Inward FDI Stock and Growth in Central and Eastern Europe," Review of Economics & Finance, Better Advances Press, Canada, vol. 1, pages 19-30, February.
    15. Iamsiraroj, Sasi, 2016. "The foreign direct investment–economic growth nexus," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 116-133.
    16. René Belderbos & Jianglei Zou, 2006. "Foreign Investment, Divestment and Relocation by Japanese Electronics Firms in East Asia," Asian Economic Journal, East Asian Economic Association, vol. 20(1), pages 1-27, March.
    17. Kevin S. Nell & Maria M. De Mello, 2019. "The interdependence between the saving rate and technology across regimes: evidence from South Africa," Empirical Economics, Springer, vol. 56(1), pages 269-300, January.
    18. Kanta Marwah & Akbar Tavakoli, 2004. "The Effect of Foreign Capital and Imports on Economic Growth: Further Evidence from Four Asian Countries," Carleton Economic Papers 04-02, Carleton University, Department of Economics.
    19. Bing Guo & Yun Lou & David Pérez‐Castrillo, 2015. "Investment, Duration, and Exit Strategies for Corporate and Independent Venture Capital‐Backed Start‐Ups," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(2), pages 415-455, June.
    20. Andrzej Cieślik & Sarhad Hamza, 2022. "Inward FDI, IFRS Adoption and Institutional Quality: Insights from the MENA Countries," IJFS, MDPI, vol. 10(3), pages 1-19, June.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijfss:v:13:y:2025:i:2:p:63-:d:1633984. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.