Foreign entry and firm R&D: evidence from Chinese manufacturing industries

Anwar, Sajid, and Sun, Sizhong (2013) Foreign entry and firm R&D: evidence from Chinese manufacturing industries. R&D Management, 43 (4). pp. 303-317.

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By making use of firm-level panel data from 2005 to 2007, this paper empirically examines the relationship between research and development (R&D) behaviour and the presence of foreign firms in China's four major manufacturing industries. The manufacturing industries considered are (1) car manufacturing, (2) household electrical appliances, (3) electronics and (4) communication equipment manufacturing. We find that the presence of foreign firms has resulted in a significant increase in R&D intensity of all four manufacturing industries in China. While the average R&D intensity in communication equipment manufacturing is the highest, the electronics industry, which has the highest level of foreign presence, has experienced a relatively large increase in R&D intensity. This suggests that China's electronics manufacturing sector is responding to rising competition from foreign firms located in China. Foreign presence in China's car manufacturing sector is relatively small, and this industry has experienced a relatively small increase in R&D intensity because of foreign presence.

Item ID: 26169
Item Type: Article (Research - C1)
ISSN: 1467-9310
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Date Deposited: 12 Sep 2013 04:55
FoR Codes: 14 ECONOMICS > 1402 Applied Economics > 140209 Industry Economics and Industrial Organisation @ 100%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9102 Microeconomics > 910203 Industrial Organisations @ 100%
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