This paper studies the relationship between foreign ownership and
innovations of high novelty in context of advanced developing countries.
We develop hypotheses about a direct relationship in terms of two
dimensions, propensity and intensity of innovations of high novelty, and
a contingency hypothesis about the moderating impact of R&D
internationalisation on the relationship with propensity. The analysis
is based on innovation survey data on manufacturing firms from Jiangsu
province of China. Hypotheses are tested using non-parametric methods.
We find that foreign firms do not have a higher propensity of
innovations of high novelty, not even when they engage in formal R&D.
However, the evidence suggests that foreign firms have a higher
intensity of innovations of high novelty than domestic firms.
JEL codes: F23; L60; O31
Keywords: multinational enterprises, foreign firms; innovation; manufacturing; China
UNU-MERIT Working Papers ISSN 1871-9872