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

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journal contribution
posted on 31.10.2017, 09:33 by Xiaolan Fu, Jun Hou, Xiaohui Liu
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.

History

School

  • Business and Economics

Department

  • Business

Citation

FU, X., HOU, J. and LIU, X., 2018. Unpacking the relationship between outward direct investment and innovation performance: Evidence from Chinese firms. World Development, 102, pp. 111-123.

Publisher

© Elsevier

Version

AM (Accepted Manuscript)

Publisher statement

This paper was accepted for publication in the journal World Development and the definitive published version is available at https://doi.org/10.1016/j.worlddev.2017.09.021.

Acceptance date

27/09/2017

Publication date

2017-11-05

ISSN

0305-750X

Language

en