China’s Region OFDI And Innovation Performance: Examining The Effect Of Technology Gap And Absorptive Capacity

Previous studies have been written the impact of Outward Foreign direct investment (OFDI) on innovation performance is one of the most controversial topics (Li, 2016; Luo, 2011). Studies of the OFDI show that in the process of integration of the national economy, the role of OFDI on innovation development of the host country may have a double character. OFDI is expected to generate direct effects on the host country regional innovation as well as indirect effects stemming from the increase in economy and competitiveness of local producers. The former will benefit from spillover effects arising from the establishing multinationals, through different channels or mechanisms. Moreover, most of the studies suggested that strategic asset-seeking occupied a considerable proportion of emerging economies OFDI (Gammeltoft, Pradhan and Goldstein, 2010; Luo and Tung, 2007; Mathews, 2006). Under the circumstances, it is reasonable to suppose that OFDI may have substantial influence upon the innovation performance of the domestic regions in which multinational enterprises are located.