Do -Newly Oligopolistic Reaction- and Host Technology Resources Matter for MNC’s Location —A Study in China’s Technology IndustriesReport as inadecuate




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This paper aims at studying the determinants of inward Foreign Direct Investment FDI varying with sectors, by considering particularly multinational corporation MNC’s location strategies and local technology resources in host industries. Using data from China’s National Bureau of Statistics and National Development and Reform Commission, we empirically analyze the main determinants of industrial inward FDI, across 20 manufacturing sectors 2-digit in China, over the period 2001-2008, and we are particularly interested in 9 high-technology HT and medium-high-technology MHT industries. The random effect panel estimations reveal that when industrial technological intensity is controlled, host technology resources are significantly positive determinants for newly inward FDI. The dynamic econometrical approach by System Generalized Method of Moment GMM estimations for HT and MHT industries obtain interesting results, which show evident impacts on MNC’s strategic behaviors, brought about by geographic agglomeration or industrial concentration effects and local protection that we will call -new oligopolistic reactions-. Besides, FDI in HT and MHT industries are both market and export seeking. High productivity, large economies of scale, and abundant technology resources attract newly FDI in these industries. This study has two contributions: firstly, it covers the deficiency that many researches on FDI in China only focus on aggregate flow without distinguishing host sector’s characteristics; secondly, it provide the local government some useful suggestions on regional development and industrial policies, especially in technology industries.

KEYWORDS

Industrial FDI, Newly Oligopolistic Reaction, Host Technology Resources, Technology Industries, China

Cite this paper

J. Mucchielli and P. Yu -Do -Newly Oligopolistic Reaction- and Host Technology Resources Matter for MNC’s Location? —A Study in China’s Technology Industries,- Technology and Investment, Vol. 2 No. 3, 2011, pp. 171-183. doi: 10.4236-ti.2011.23018.





Author: Jean-Louis Mucchielli, Pei Yu

Source: http://www.scirp.org/



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