Foreign competition and innovation: The mediating role of imitation

This study examines the extent to which foreign competition affects the innovation performance of domestic firms through imitation, given firms’ absorptive capacity. In analyzing longitudinal firm-level data from the U.K., we find a mediating effect of imitation on the relationship between foreign competition and local firms’ innovation performance, and an inverted U-shaped relationship between imitation and the innovation performance of local firms. Our findings further reveal that absorptive capacity moderates the mediating effect of imitation, diminishing innovation gains at moderate levels of imitation and mitigating the diminishing innovation performance at high levels of imitation

Export-total factor productivity growth nexus in East Asian economies

Despite increasing interest in the relationship between trade and macroeconomic performance in development economics, very limited studies have been conducted on the causal links between exports and productivity growth in Asian economies. This paper examines empirically the interplay between exports and productivity growth for eight East Asian economies in a multivariate framework by applying bound tests and modified Wald tests. The results indicate that causality is bi-directional in the case of Korea, Singapore and Taiwan, while unidirectional from productivity to exports for Mainland China, Hong Kong, Indonesia, Malaysia and the Philippines. These findings provide little support for the conventional export-led growth hypothesis

International knowledge flows in the context of emerging-economy MNEs and increasing global mobility

International knowledge flows in the context of emerging-economy MNEs and increasing global mobilit

Unpacking the relationship between outward direct investment and innovation performance: Evidence from Chinese firms

This study investigates the impact of outward direct investment (ODI) by Chinese MNEs on innovation performance and the conditions under which such an impact is moderated, based on a sample of Chinese firms. The empirical evidence suggests that undertaking ODI leads to an increase in the innovation performance of these Chinese firms. The impact of ODI on innovation is contingent on firm characteristics such as in-house R&D, strategic orientation and international experiences as well as contextual factors associated with investment destinations and industry contexts. We also find that learning through ODI is a complex process. There is a substitution between ODI and in-house R&D in Chinese MNEs. Our findings suggest that conducting ODI in developed countries serves as an effective channel for latecomer firms to overcome internal resource constraints and leapfrog towards the technology frontier

Top executive compensation, regional institutions and Chinese OFDI

Integrating agency and institutional theories, this paper examines the impact of top-executive compensation and regional institutions on the outward FDI(OFDI) of a sample of Chinese-listed firms. The results show that top-executive cash pay and equity ownership have a positive association with OFDI. Differing from previous studies focusing on cross-country institutional variances, we take variations in within-country institutions into account and find that regional institutions in terms of product markets, factor markets and legal systems play an important role in OFDI and positively moderate the governance role of managerial equity ownership

A double-edged sword: the impact of institutions and political relations on the international market expansion of Chinese state-owned enterprises

This study examines the interaction of three factors, the involvement of the home country government, of host country institutions and of bilateral political relations, as they affect the post-entry market expansion of Chinese state-owned enterprises (SOEs) in emerging, developing and developed countries. This study employs the case study method. The findings show that home country government involvement can either support or constrain SOEs’ subsequent market expansion. In emerging and developing countries, underdeveloped institutions create difficulties which can deter the market expansion of Chinese SOEs. In developed host countries, the challenges associated with unfamiliar institutions can be overcome through experiential learning. The political relations between the host country and China may influence the impact of institutions in the host country on the market expansion of Chinese SOEs

Foreign competition, domestic knowledge base and innovation activities: evidence from Chinese high-tech industries

Using panel data analysis for a sample of Chinese high-technology industries from 1998 to 2008, this study examines how industry characteristics affect industry innovation activities. Differing from existing studies, our research considers the impact of foreign competition on innovation activities at industry level in a large emerging economy. The results indicate that the intensity of competition from foreign invested enterprises (FIEs) and domestic skill intensity affect industry buy and make activities. Foreign competition is positively associated with the intensity of buy activity, but negatively affects the intensity of make activity. Further, the findings show that domestic skill intensity weakens the impact of foreign competitive pressure on innovation activities. Our empirical evidence has important policy implications

Expatriates, subsidiary autonomy and the overseas subsidiary performance of MNEs from an emerging economy

Despite a growing body of research on the role of expatriates in subsidiary performance, the mechanisms through which expatriates affect subsidiary performance are still the subject of debate. Drawing on the resource dependence theory, we examine the indirect effect of expatriates on subsidiary performance via subsidiary autonomy based on a sample of Chinese multinational enterprises (MNEs). The findings show that an increase in expatriates reduces the level of subsidiary autonomy and thus negatively affects subsidiary performance. We also find that the institutional quality of host countries reinforces the negative impact of expatriates on subsidiary autonomy, but reduces the importance of the latter on subsidiary performance

Chinese migrants and their impact on homeland development

This paper aims to systematically examine the impact of Chinese migrants on the economic activities of indigenous Chinese firms from two dimensions: foreign direct investment (FDI) by ethnic Chinese (ECI) and returnees. Using a unique dataset for firms in Zhongguancun Science Park, Beijing, we carry out an in-depth empirical study on the effects of ECI and returnees on indigenous Chinese firms’ productivity, exports and R&D in comparison with the effects of non-ethnic Chinese FDI. The findings have important policy implication

Does learning at home and from abroad boost the foreign subsidiary performance of emerging economy multinational enterprises?

Based on a sample of Chinese firms that have undertaken outward FDI, we examine the extent to which domestic learning and host market learning affect subsidiary performance. The findings indicate that domestic learning through collaboration with foreign firms at home, and host market learning, positively contribute to subsidiary performance. We find some synergetic effects between domestic learning and host market learning, and these two types of learning jointly shape subsidiary performance. By providing new empirical insights into the performance implications of different types of learning, this study helps advance our understanding of EMNEs