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Foreign entry and firm R&D : evidence from Chinese manufacturing industries
Author(s) -
Anwar Sajid,
Sun Sizhong
Publication year - 2013
Publication title -
randd management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.253
H-Index - 102
eISSN - 1467-9310
pISSN - 0033-6807
DOI - 10.1111/radm.12009
Subject(s) - manufacturing , competition (biology) , manufacturing sector , business , r&d intensity , electronics , industrial organization , commerce , labour economics , economics , marketing , engineering , electrical engineering , management , ecology , biology
By making use of firm‐level panel data from 2005 to 2007, this paper empirically examines the relationship between research and development ( R&D ) behaviour and the presence of foreign firms in C hina's four major manufacturing industries. The manufacturing industries considered are (1) car manufacturing, (2) household electrical appliances, (3) electronics and (4) communication equipment manufacturing. We find that the presence of foreign firms has resulted in a significant increase in R&D intensity of all four manufacturing industries in C hina. While the average R&D intensity in communication equipment manufacturing is the highest, the electronics industry, which has the highest level of foreign presence, has experienced a relatively large increase in R&D intensity. This suggests that C hina's electronics manufacturing sector is responding to rising competition from foreign firms located in C hina. Foreign presence in C hina's car manufacturing sector is relatively small, and this industry has experienced a relatively small increase in R&D intensity because of foreign presence.