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ID: 171891

Chinese Outward Foreign Direct Investment and Industrial Upgrading from the Perspective of Differences among Countries / Chen, Hao

Chen, Hao	Journal Article
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Summary/Abstract

This paper constructs a two‐sector model to identify the effects of outward foreign direct investment (OFDI) in different countries on China's industrial upgrading and conducts an empirical analysis using provincial‐level panel data from 2003–2015. The results show that China can benefit from industrial upgrading via OFDI in developed countries by way of reverse technology spillover. This effect is significant in the eastern region, but not in the central and western regions. China can also benefit from industrial upgrading via OFDI in developing countries and countries along the Belt and Road through marginal industrial transfer. This effect is more significant in the central region, followed by the western and eastern regions. Our results imply that China should promote technology‐seeking OFDI in developed countries, and enhance efficiency‐seeking OFDI in developing countries, especially in countries along the Belt and Road.

Key Words

Outward Foreign Direct Investment ; Industrial upgrading ; Reverse Technology Spillover ; Marginal Industrial Transfer

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ID: 164724

Technology gap, Reverse technology spillover and domestic innovation performance in outward foreign direct investment: evidence from China / Hong, Jin; Zhou, Chongyang ; Yanrui Wu; Marinova, Dora

Hong, Jin	Journal Article
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This research adds to the literature studying the effects of outward foreign direct investment (OFDI) on domestic innovation performance and the moderating effect of a technology gap between host and home countries. New definitions of observed technology gap and expected technology gap are proposed. An observed technology gap captures the existing differences in technology level between establishments, regions or countries. An expected technology gap is an indication of the effort of imitating and learning from technology leaders. The corresponding measures and effects of observed and expected technology gaps on OFDI‐induced reverse technology spillover are analyzed. OFDI in developed countries promotes innovation performance. However, OFDI in emerging markets hampers innovation performance. It is also found that regions with a wider observed technology gap and a narrower expected technology gap can benefit more from OFDI.

Key Words

Outward Foreign Direct Investment ; Technology Gap ; Innovation Performance ; Reverse Technology Spillover

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