THE EFFECT OF OFDI INTENSITY ON TFP: THE MODERATING ROLE OF R&D

Previous research has proved that Outward Foreign Direct Investment (OFDI) activities can generate positive external influence to enhance Total Factor Productivity (TFP) of parent firms by the way of knowledge reverse spillover. This paper further examines whether OFDI firms benefit their productivity by enhancing the overseas investment intensity and explores the moderating role of firms' R&D intensity on the relationship between OFDI intensity and TFP. By examining 151 listed firms in China from 2011 to 2016, we make an empirical analysis and find that firms' OFDI intensity and their TFP presents a positive linear relationship. Moreover, while the level of firms' R&D intensity increased with the enhancement of OFDI intensity, it will negatively moderate the positive linkage between OFDI intensity and TFP. These results provide a deepening and meaningful understanding of firms' TFP in terms of OFDI intensity which can be quantified We point out theoretical and managerial implications for transnational investment of managers and Chinese government following.