Drivers of Technology Upgrading: Do Foreign Acquisitions Matter to Chinese Firms?

Technology upgrading is a key element of industrialization in developing countries while technology transfer through trade and FDI has for a long time been regarded as a major engine of technolog)? upgrading, in recent years there has been a renewed emphasis on indigenous innovations as a means for building technology capabilities in developing countries. Many developing countries joined the competition for attracting FDI in the expectation that advanced technological and managerial knowledge embedded in FDI can buildup technological capabilities in their country and drive technological upgrading in these economies. However the question is whether developing countries can rely on foreign technology to catch up with industrialized countries and whether foreign acquisition is one of the major drivers of technology upgrading in developing countries. China is a good example for investigating this question.

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