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Regional Absorptive Capacity and the Contribution of Multinational Corporations to Knowledge Production in the Local Economy within a Developing Economy Context: The Case of China (RACCOM)
Start date: Sep 1, 2013, End date: Aug 31, 2015 PROJECT  FINISHED 

Geographers, economists, and planners have recently begun to emphasise knowledge production as an important source of both regional and national economic growth. In this context, the subsidiary of a multinational corporation (MNC) can be seen as a conduit for the importation of superior knowledge. In developing countries, where knowledge bases are weaker than in advanced economies, MNCs are often expected to be a primary source of innovation.This study examines whether this view is supported by the evidence based on an analysis of China. This research distinguishes itself from the existing literature by focusing on (1) a region (rather than a firm) as a unit of knowledge absorption and (2) knowledge flow as such, rather than its outcomes (such as productivity improvement).The project’s objective is twofold. First, it measures an MNC subsidiary’s contribution to local knowledge production and compares it against that of local firms. Second, it explains the difference among cities’ and regions’ ability to learn from MNC subsidiaries using an econometric model.

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