Intra-industry knowledge spillovers from foreign direct investment in research and development

Evidence from China's "Silicon Valley"

Yasuyuki Todo, Weiying Zhang, Lei An Zhou

Research output: Contribution to journalArticle

16 Citations (Scopus)

Abstract

This study examines a specific channel of technology diffusion from multinational enterprises to domestic firms in less developed regions: research and development (R&D) activities of multinational enterprises in the host country. Using firm-level panel data from a Chinese science park, known as China's "Silicon Valley," we find that the R&D stock of foreign-owned firms has a positive effect on the productivity of domestic firms in the same industry, while the capital stock of foreign firms has no such effect. These results suggest that foreign firms' knowledge spills over within industries through their R&D activities, but not through their production activities. In addition, we find no evidence of spillovers from domestic firms or firms from Hong Kong, Macao, or Taiwan, suggesting that the size of knowledge spillovers is larger when the technology gap between source and recipient firms is larger.

Original languageEnglish
Pages (from-to)569-585
Number of pages17
JournalReview of Development Economics
Volume15
Issue number3
DOIs
Publication statusPublished - 2011 Aug
Externally publishedYes

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foreign direct investment
direct investment
foreign investment
research and development
silicon
firm
valley
China
industry
knowledge
evidence
multinational enterprise
technology diffusion
Macao
panel data
Hong Kong
Taiwan
recipient
productivity
science

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Development

Cite this

Intra-industry knowledge spillovers from foreign direct investment in research and development : Evidence from China's "Silicon Valley". / Todo, Yasuyuki; Zhang, Weiying; Zhou, Lei An.

In: Review of Development Economics, Vol. 15, No. 3, 08.2011, p. 569-585.

Research output: Contribution to journalArticle

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