Location choice of foreign direct investment in technical KIBS in China: impact of human capital and intellectual property rights protection

Abstract

PurposeThis study considers the “technology creation” characteristic of technical knowledge-intensive business services (T-KIBS) and examines how human capital and intellectual property rights (IPR) protection affect the location choice of foreign direct investment (FDI) in China for two types of T-KIBS: (1) information transmission, software and information technology (ICT) services and (2) scientific research and technology (SCI) services.Design/methodology/approachOur empirical analysis is based on panel data on 22 Chinese provinces from 2009 to 2017. We use the generalized method of moments estimation for the regression analysis.FindingsFDI in ICT services prefers regions with high human capital, while FDI in SCI services favors regions with good IPR protection.Research limitations/implicationsFuture research could use more comprehensive data and qualitative interviews to enhance the findings.Practical implicationsThese findings provide a foundation for China’s future policy on attracting FDI into T-KIBS, especially in areas related to human capital and IPR protection.Originality/valueThis study bridges the research gap on the FDI location choice of T-KIBS in China by clarifying the influences of human capital and IPR protection and providing theoretical support for the location choice of T-KIBS FDI.