FDI knowledge spillovers and returnees’ repatriation speed and irregularity: evidence from Chinese high-tech firms

Abstract

ABSTRACT This paper investigates how returnees’ repatriation speed and irregularity affect FDI knowledge spillovers. Using a unique dataset of high-tech Chinese firms located in Zhongguancun Science Park in Beijing from 2007 to 2013, we find that returnees are vital in improving local firms’ absorptive capacity and disseminating FDI externalities. Our empirical results show that returnees’ high repatriation speed positively contributes to the local absorption of FDI knowledge spillovers, whereas repatriation irregularity dampens it. This research highlights the time-based attributes of returnees’ repatriation as a new factor of absorptive capacity when learning from FDI knowledge. It thus provides a more integrated viewpoint on the relationship between returnees and FDI spillovers. Our findings have important implications for policymakers and practitioners.