Japanese Foreign Direct Investment in China and Technology Spillovers: An Innovation Network Perspective

Tengkun Zhou; Junli Zhao

doi:10.62177/apemr.v3i5.1814

Authors

Tengkun Zhou Donghua University
Junli Zhao Donghua University

DOI:

https://doi.org/10.62177/apemr.v3i5.1814

Keywords:

Intermediate Technologies Embodied in Japanese FDI in China, Innovation Network, Technology Spillovers, Absorptive Capacity

Abstract

Japan is an important source of foreign direct investment (FDI) in China. Based on an innovation network framework, this study combines data on Japanese investment in China from 2016 to 2021 with relevant patent data to systematically examine the technology spillover effects of intermediate technologies embodied in Japanese FDI in China and the underlying mechanisms. The results show that Japanese FDI in China generates significant technology spillover effects overall. However, absorptive capacity exerts a significant negative moderating effect on the technology spillovers of Japanese FDI, indicating that technological fields with stronger absorptive capacity are relatively less dependent on technology spillovers from Japanese FDI. From the perspectives of technological fields and innovation networks, this study provides new empirical evidence for understanding the mechanisms of technology diffusion through Japanese FDI in China and for further optimizing China’s FDI structure.

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