Production and R&D Networks of Foreign Ventures in China: Implications for Technological Dynamism and Regional Development
13 Pages Posted: 27 Jul 2010
There are 3 versions of this paper
Production and R&D Networks of Foreign Ventures in China: Implications for Technological Dynamism and Regional Development
Production and R&D Networks of Foreign Ventures in China: Implications for Technological Dynamism and Regional Development
Production and R&D Networks of Foreign Ventures in China: Implications for Technological Dynamism and Regional Development
Date Written: July 23, 2010
Abstract
This paper analyzes the nature of FDI local networks in production and R&D activities in China and discusses their implications for technological dynamism and regional development. We investigate foreign ventures (or foreign-invested enterprises, FIEs) in the information and communication technology (ICT) industry, based on a large-scale survey of ICT firms conducted in three mega-city regions of China: Beijing, Shanghai-Suzhou, and Shenzhen-Dongguan. Our data show that FIEs in China are gradually localizing their production, but the extent of local embeddedness is contingent upon home country effects, local specific contexts and FDIehost region relationships. We have also found significant influence of industrial agglomeration on FDI location and network decisions. Beijing tends to have broader FDI sources and better integrated global-local networks, while in those regions dominated by FDI such as Suzhou and Dongguan, FIEs are thinly embedded with local economies and tend to establish global-local networks among themselves; local embeddedness is limited by a series of technological, institutional, spatial, and structural mismatches. Shanghai and Shenzhen are in between. More efforts are still needed to better integrate FDI with local economies and strengthen China’s local innovative capacities.
Keywords: Foreininvestment, Production networks, Embeddedness, regional development, China
JEL Classification: L63, O3, O33, O53, P33, R12
Suggested Citation: Suggested Citation
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