Spillover effects of FDI on innovation in China : evidence from the provincial data

Kui Yin CHEUNG; Ping LIN

doi:10.1016/S1043-951X(03)00027-0

Spillover effects of FDI on innovation in China : evidence from the provincial data

Kui Yin CHEUNG, Ping LIN

Department of Economics

Research output: Journal Publications › Journal Article (refereed)

334 Citations (Scopus)

Abstract

Foreign direct investment (FDI) can benefit innovation activity in the host country via spillover channels such as reverse engineering, skilled labor turnovers, demonstration effects, and supplier-customer relationships. Using provincial data from 1995 to 2000, we find positive effects of FDI on the number of domestic patent applications in China. This finding is robust under both pooled time-series and cross-section data estimation and panel data analysis and for different types of patent applications (invention, utility model, and external design). The spillover effect is the strongest for minor innovation such as external design patent, highlighting a "demonstration effect" of FDI.

Original language	English
Pages (from-to)	25-44
Number of pages	20
Journal	China Economic Review
Volume	15
Issue number	1
DOIs	https://doi.org/10.1016/S1043-951X(03)00027-0
Publication status	Published - 1 Mar 2004

Fingerprint

Innovation

Spillover effects

Foreign direct investment

Patents

China

Demonstration effect

Supplier-customer relationships

Host country

Panel data analysis

Spillover

Labour turnover

Reverse engineering

Skilled labor

Invention

Innovation activities

Cross section

Keywords

FDI
Patent
Spatial effect
Spillover

Cite this

CHEUNG, K. Y., & LIN, P. (2004). Spillover effects of FDI on innovation in China : evidence from the provincial data. China Economic Review, 15(1), 25-44. https://doi.org/10.1016/S1043-951X(03)00027-0

CHEUNG, Kui Yin ; LIN, Ping. / Spillover effects of FDI on innovation in China : evidence from the provincial data. In: China Economic Review. 2004 ; Vol. 15, No. 1. pp. 25-44.

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CHEUNG, KY & LIN, P 2004, 'Spillover effects of FDI on innovation in China : evidence from the provincial data', China Economic Review, vol. 15, no. 1, pp. 25-44. https://doi.org/10.1016/S1043-951X(03)00027-0

Spillover effects of FDI on innovation in China : evidence from the provincial data. / CHEUNG, Kui Yin; LIN, Ping.

In: China Economic Review, Vol. 15, No. 1, 01.03.2004, p. 25-44.

Research output: Journal Publications › Journal Article (refereed)

TY - JOUR

T1 - Spillover effects of FDI on innovation in China : evidence from the provincial data

AU - CHEUNG, Kui Yin

AU - LIN, Ping

PY - 2004/3/1

Y1 - 2004/3/1

N2 - Foreign direct investment (FDI) can benefit innovation activity in the host country via spillover channels such as reverse engineering, skilled labor turnovers, demonstration effects, and supplier-customer relationships. Using provincial data from 1995 to 2000, we find positive effects of FDI on the number of domestic patent applications in China. This finding is robust under both pooled time-series and cross-section data estimation and panel data analysis and for different types of patent applications (invention, utility model, and external design). The spillover effect is the strongest for minor innovation such as external design patent, highlighting a "demonstration effect" of FDI.

AB - Foreign direct investment (FDI) can benefit innovation activity in the host country via spillover channels such as reverse engineering, skilled labor turnovers, demonstration effects, and supplier-customer relationships. Using provincial data from 1995 to 2000, we find positive effects of FDI on the number of domestic patent applications in China. This finding is robust under both pooled time-series and cross-section data estimation and panel data analysis and for different types of patent applications (invention, utility model, and external design). The spillover effect is the strongest for minor innovation such as external design patent, highlighting a "demonstration effect" of FDI.

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KW - Spatial effect

KW - Spillover

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