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FDI, R&D and Innovation Output in the Chinese Automobile Industry

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  • Chen, Fang

    (Chinese Academy of Sciences)

  • Mohnen, Pierre

    (UNU-MERIT, Maastricht University, and CIRANO)

Abstract

After joining the World Trade Organization (WTO), China witnessed a major inflow of Foreign Direct Investment (FDI). Many famous automobile firms of developed countries were attracted to invest in China to cooperate with domestic firms. This paper uses firm-level data of the Chinese automobile industry to analyze the determinants of, and the interrelationships between, innovation input and innovation output, and in particular whether FDI had any influence on these two aspects of innovation. A generalized tobit model will be estimated for both R&D and the share of innovative sales for 2002/2003 and 2005/2006. The findings show that FDI firms are less R&D intensive but, when they innovate in new products, they are more product innovative than domestic-funded firms.

Suggested Citation

  • Chen, Fang & Mohnen, Pierre, 2009. "FDI, R&D and Innovation Output in the Chinese Automobile Industry," MERIT Working Papers 2009-044, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2009044
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    File URL: https://unu-merit.nl/publications/wppdf/2009/wp2009-044.pdf
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    References listed on IDEAS

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    1. Rufin Baghana & Pierre Mohnen, 2009. "Effectiveness of R&D tax incentives in small and large enterprises in Québec," Small Business Economics, Springer, vol. 33(1), pages 91-107, June.
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    Cited by:

    1. Elif Kalayci & Mehmet Teoman Pamukçu, 2011. "Analysis of Foreign Ownership, R&D and Spillovers in Developing Countries: Evidence from Turkey," Working Papers 642, Economic Research Forum, revised 10 Jan 2011.
    2. Yi Qu & Ting Qu & Yaoan Wu, 2017. "The role of regional formal institutions and foreign direct investment in innovation in Chinese enterprises," Asia Pacific Business Review, Taylor & Francis Journals, vol. 23(1), pages 27-43, January.

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    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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