Technological Assets and HIgh-tech Chinese Firms’ OFDI to DEs - a Techno-Nationalism Perspective

Abstract

This study investigates the association between technological assets and Chinese high-tech firms’ OFDI to developed economies (OFDI-to-DE) through a techno-nationalism perspective. In China, absorbing advanced technologies from developed economies has been summarized as an important approach to achieve economic prosperity, so a belief that enhancing technological connectedness benefits the country’s survival and development may drive Chinese high-tech firms to increase their OFDI as they accumulate richer technological assets. However, the positive association would be impaired by a belief in developed economies that their governments need to take efforts to reduce technological exchanges with China, as the country has gained an increased capacity to challenge the hegemon of the U.S. with an incompatible institutional framework. Leveraging data collected from 1234 Chinese listed high-tech firms, we found accumulated technological assets impels Chinese high-tech firms to increase their OFDI-to-DE, while the effect is weakened by firms’ state ownership and innovation subsidies acquired from Chinese governments. In addition, general competitiveness of China reflected as the reduced GDP lag against the U.S., and specific competitiveness of the country in technological arena also weakens the positive influence of technological assets on Chinese high-tech firms’ OFDI-to-DE.