The moderating effect of foreign direct investment intensity on local firms' intangible resources investment and performance implications: A case from China |
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Authors: | Crystal X Jiang Qin Yang Sali Li Yong Wang |
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Institution: | aSchool of Business, Bryant University, 1150 Douglas Pike, Smithfield, RI 02917, United States;bSchool of Business, Robert Morris University, 6001 University Blvd., Moon Township, PA 15108, United States;cSheldon B. Lubar School of Business, University of Wisconsin Milwaukee, 2200 E. Kenwood Blvd., Milwaukee, WI 53211, United States;dSchool of Business, Western New England College, 1215 Wilbraham Road, Springfield, MA 01119, United States |
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Abstract: | Foreign direct investment (FDI) has been known to generate positive externalities to increase the productivity and competitiveness of domestic industries through knowledge and technology spillover. This study focuses on the indirect effect of FDI by investigating whether FDI intensity benefits local firms by enhancing the local intellectual property rights (IPR) environment. We argue that due to the inadequate IPR environment in emerging economies, local firms' intangible resources investment can be negatively related to firm performance. Further, we suggest that FDI intensity can improve the local IPR environment, thereby enhancing the appropriability of local firms' intangible resources investment. We find empirical evidence to support our arguments by examining 70 semiconductor firms in China from 1999 to 2006, and we discuss the theoretical and practical implications of the impact of FDI intensity on the local IPR environment. |
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Keywords: | Intangible resources Intellectual property Foreign direct investment Emerging economy Regional institution |
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