Foreign competition, domestic knowledge base and innovation activities: evidence from Chinese high-tech industries

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Colleges, School and Institutes


Using panel data analysis for a sample of Chinese high-technology industries from 1998 to 2008, this study examines how industry characteristics affect industry innovation activities. Differing from existing studies, our research considers the impact of foreign competition on innovation activities at industry level in a large emerging economy. The results indicate that the intensity of competition from foreign invested enterprises (FIEs) and domestic skill intensity affect industry buy and make activities. Foreign competition is positively associated with the intensity of buy activity, but negatively affects the intensity of make activity. Further, the findings show that domestic skill intensity weakens the impact of foreign competitive pressure on innovation activities. Our empirical evidence has important policy implications. © 2013 Elsevier B.V. All rights reserved.


Original languageEnglish
Pages (from-to)414-422
Number of pages9
JournalResearch Policy
Issue number2
Early online date17 Dec 2013
Publication statusPublished - Mar 2014


  • Buy and make innovation activities, Foreign competition, Domestic skill intensity, Chinese high-technology industries