Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/28838
Authors: 
Girma, Sourafel
Gong, Yundan
Görg, Holger
Year of Publication: 
2008
Citation: 
[Journal:] The World Bank Economic Review [ISSN:] 0258-6770 [Publisher:] Oxford University Press [Place:] Oxford [Volume:] 22 [Issue:] 2 [Pages:] 367-382
Abstract: 
A recent, comprehensive database is used to investigate the link between inward foreign direct investment (FDI) and innovation activity in China. The results of the analysis suggest that private and collectively owned firms with foreign capital participation and those with good access to domestic bank loans innovate more than other firms do. Among enterprises not owned by the state, inward FDI at the sectoral level is positively associated with domestic innovative activity only among firms that engage in their own research and development or that have good access to domestic finance. At the sector level the effect of inward FDI into technology transfer is distinguished from the effect on domestic credit opportunities. FDI affecting credit is of little significance for state-owned enterprises and is independent of their access to finance. In contrast, better access to credit is an important channel through which FDI affects the innovation of domestic private and collectively owned enterprises.
JEL: 
O31
F23
G32
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by-nc-nd/3.0/
Document Type: 
Article

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