This paper investigates the effect of FDI on independent innovation in Chinese domestic firms, using the micro-level data in Chinese firms from 1998 to 2003. We pay particular attention to the impact of domestic access to finance. The empirical results show: Firstly, firms with foreign capital participation (Firm-level FDI) or those with good access to domestic bank loans innovate more than others do; Secondly, we also find that FDI at the industry level is positively associated with independent innovation in Chinese domestic firms only if firms engage in own R&D or they have good access to domestic finance.
展开▼
