Foreign Technology Introduction and Independent Innovation Going Global
Foreign technology introduction has been pivotal and critical in enabling China's innovation catch-up as well as nurturing independent innovation capabilities since the reform and opening up.As global technological competition in-tensifies increasingly while innovation becomes central to national strategies,a critical question arises,demanding an-swers from China:Can foreign technology introduction further enhance the international competitiveness of China's tech-nological achievements and propel independent innovation to go global?This is essential for advancing high-standard opening up and achieving sustainable global integration.In light of this context,this paper systematically examines the impact of foreign technology introduction on firms'independent innovation going global through a combination of theo-retical and empirical analyses.From a theoretical perspective,this paper draws on the frameworks of Melitz(2003),Akcigit et al.(2018),and Ak-cigit&Melitz(2021),incorporating intellectual property violations,foreign technology introduction,and technology go-ing global into an analytical model.The paper posits that foreign technology introduction facilitates independent innova-tion going global through three primary effects:the incentive effect,where firms intensify their innovation efforts to stay competitive;the network effect,which facilitates acceleration through global innovation networks and collaborations;and the competition effect,which encourages firms to seek international markets amid heightened domestic competition.On the empirical front,the paper introduces a novel approach by leveraging data on patent applications filed by foreign enti-ties in China's patent database to construct an industry-year indicator that reflects the intensity of foreign technology in-troduction.This metric is further combined with information from the PATSTAT patent database to identify firm-level overseas patenting intensity,enabling a micro-level examination of the impact of foreign technology introduction on pat-ent expansion to international markets.The empirical findings indicate that foreign technology introduction substantially encourages independent innovation going global.This conclusion remains robust after accounting for potential endogene-ity concerns,such as omitted variables and reverse causality,and holds under various robustness checks,including altema-tive measurements of the core explanatory variable,controlling for industry-level R&D intensity differences,including ad-ditional control variables,altering regression samples,and excluding other confounding factors.A closer examination of the mechanisms suggests that the increase in firm-level innovation investment,active inte-gration into global innovation networks,and shifts of business operations overseas in response to intensified domestic competition are the main channels through which foreign technology introduction facilitates independent innovation go-ing global.Heterogeneity analysis reveals that the positive effect of foreign technology introduction on independent inno-vation going global is more pronounced in firms led by executives who have international experience,firms with stronger internal innovation capabilities,state-owned enterprises,manufacturing enterprises,and those acquiring technology from developed countries.Additional analysis provides further insights.First,the effect is significantly amplified in upstream industries,where increased foreign technology introduction intensity translates into stronger overseas expansion,while downstream effects remain statistically insignificant.Second,a notable"diversion pattern"emerges between technology-introducing countries and the destinations of patents going global;this effect is magnified when the technology source and destination countries have a comprehensive trade agreement,are geographically closer,or exhibit higher levels of technological advancement.Third,a strong alignment exists between the destinations of patents going global and firms'export markets,whereas consistency with OFDI destinations is relatively weaker.This research provides richer micro-level evidence,enhancing the understanding of Chinese firms'strategies for in-ternational technology expansion.It also offers theoretical and policy guidance,supporting China's continued efforts to achieve high-standard opening up,enhance the global competitiveness of independent innovation,and ultimately over-come the middle-technology trap.
Foreign Technology IntroductionTechnology Going GlobalIndependent InnovationHigh-standard Open-ing Up
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