External linkages and regional diversification in China: The role of foreign multinational enterprises

Author:

Qiao Yibo1,Ascani Andrea2,Morrison Andrea345ORCID

Affiliation:

1. School of Architecture and Urban Planning, Nanjing University, Nanjing, China

2. Social Sciences Area, Gran Sasso Science Institute (GSSI), L’Aquila, Italy

3. Department of Political and Social Sciences, University of Pavia, Pavia, Italy

4. ICRIOS – Department of Management and Technology, Bocconi University, Milan, Italy

5. Department of Human Geography and Planning, Utrecht University, Utrecht, The Netherlands

Abstract

This article investigates the role of local external linkages in supporting regional industry entry in new activities, by specifically considering the role of foreign multinational enterprises (MNEs). Theoretically, we construct an original conceptual framework encompassing different potential trajectories of regional diversification based on the presence of MNEs. Empirically, we focus on the case of 279 Chinese prefectures over 1998–2007 and our results suggest that the presence of MNEs is associated with industry entry in unrelated and complex industries, supporting the idea that regional external linkages can activate processes of diversification that modify the technological and industrial portfolio of local economies.

Funder

Nederlandse Organisatie voor Wetenschappelijk Onderzoek

Publisher

SAGE Publications

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