Essays on outward foreign direct investment and technological innovation

Li, Yunxiong (2021) Essays on outward foreign direct investment and technological innovation. PhD thesis, London School of Economics and Political Science.

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Abstract

This thesis studies outward foreign direct investment (OFDI) of Chinese multinational enterprises (CMNEs) and technological innovation. The first three chapters explore how home country contexts influence OFDI decisions, strategies and post investment performance. Chapter 1 develops a “three internationalization advantages” framework in which CMNEs invest abroad not only on the basis of firm-specific advantages (FSA) but also on state-created and network-based advantages which can make up for the shortage of FSA. The necessary condition for the OFDI of Chinese firms is “relative FSA” over domestic competitors, to get access to state-created and network-based advantages. Chapter 2 combines the local-global connectivity literature with host location choice studies to explain the location strategies of CMNEs. Firms originating from different subnational home regions (31 Chinese provinces), show heterogenous spatial patterns in global expansion patterns, which can be partly attributed to prior connectivity between home regions and foreign countries. Export, patent co-invention activities as well as the “friendship city” relationship facilitate OFDI, and such an influence differs across investment motives. Chapter 3 focuses on post-OFDI innovation performance of CMNEs and the influence of inward FDI (IFDI). Using quasi-experimental models, empirical results indicate that OFDI has a significant impact on their subsequent innovation performance, which is affected by Chinese firms’ prior within- and between-firm interactions with IFDI and also moderated by the country of origin of the IFDI. Chapter 4 focuses on technological dynamics and rare metals (RMs). Through text mining 5,214,307 USPTO granted patents over the period 1976-2015, we found that RMs work as an important material basis for modern technologies. At the level of technology subgroups, increases in the supply of a certain RM significantly boost the innovation output of technology areas which rely heavily on this RM.

Item Type:	Thesis (PhD)
Additional Information:	© 2021 Yunxiong Li
Library of Congress subject classification:	H Social Sciences > HG Finance T Technology > T Technology (General)
Sets:	Departments > Geography and Environment
Supervisor:	Iammarino, Simona and Crescenzi, Riccardo
URI:	http://etheses.lse.ac.uk/id/eprint/4331

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