Can indigenous enterprises upgrade under open economy? The case of China

Abstract

Purpose– The purpose of this paper is to econometrically examine whether indigenous enterprises can upgrade under open economy by using micro-firm data.Design/methodology/approach– In order to make clear the impact of outward development on the indigenous manufacturing export enterprises' productivity from micro level and to propose policy recommendation, the research group selected indigenous manufacturing export enterprises in Kunshan China as research objects and made a large-scale survey. Based on micro-firm data from survey, the paper carries out empirical analysis.Findings– After controlling some other variables including innovation activity, human capital and enterprises scale, empirical result shows that export activity, establishing connections with FDI enterprises, industry clusters formed under open economy all have significant and positive effect on upgrading of indigenous enterprises.Originality/value– This paper is the first to use micro-firm data obtained from survey to examine factors affecting indigenous enterprises' upgrading capability of China.