Foreign Direct Investment Spillovers and the Geography of Innovation in Chinese Regions: The Role of Regional Industrial Specialization and Diversity

Abstract

Wang Y., Ning L., Li J. and Prevezer M. Foreign direct investment spillovers and the geography of innovation in Chinese regions: the role of regional industrial specialization and diversity, Regional Studies. Foreign direct investment (FDI) brings technology spillovers, but little is known about the interactive effects of industrial structure at the regional level on how FDI works to bring spillovers. This paper brings together technological spillovers from FDI with impacts on regional innovation through industrial structure. This is important for China as a recipient of FDI which is both regionally skewed and unevenly distributed. Results indicate that inward FDI has positive effects on regional innovation, but that industrial specialization diminishes the positive effects of FDI whilst a more diversified industrial structure enhances spillovers from inward FDI.