This paper examines the effect of foreign direct investment (FDI) on domestic innovation based on a data set covering … the pharmaceutical industries across 29 provinces in the People's Republic of China (PRC) over the period 1998-2007. We … show that there is a negative horizontal spillover effect of FDI on domestic innovation when the intellectual property …

This paper studies the impact of foreign direct investment on domestic firms' innovation in China. It provides causal … evidence by exploiting China's foreign direct investment deregulation in 2002 and employs a difference-in-difference estimation … firms' innovation benefit from foreign direct investment. Moreover, the paper emphasizes the importance of knowledge …