Spillover Effects and Technology Innovation in Local Firms: Evidence from China

This article investigates technology spillover effects of foreign-invested companies (FICs), and explores the relationships between such spillover effects and technology innovation of local firms. We adopt a survey approach and conducts empirical analysis by drawing data from 139 local firms in south China. In relation to the participating firms' technology innovative performance, demonstration effect, competition effect and backward linkage effect are figured out as factors with positive association, while hypotheses concerning labor mobility effect and forward linkage effect are not supported. The managerial implications and limitations are discussed and future studies are highlighted accordingly.