Returnee entrepreneurs, knowledge spillovers and innovation in high-tech firms in emerging economies

Abstract

Using panel data analysis, this paper investigates the impact of returnee entrepreneurs, foreign direct investment (FDI) intensity and inter-firm employee mobility on innovation in Chinese high-tech firms. International technology spillovers and internal RD efforts are found to jointly determine the innovation performance of Chinese high-tech firms, and we report that the presence of returnee entrepreneurs positively affects innovation. In addition, there are significant knowledge spillover effects associated with returnees and multinational enterprise (MNE) employee mobility, and the effects of these two components of international human mobility on local firms' innovation are mutually reinforcing. We also present the distinctive result that FDI intensity in an industry has a negative impact on local innovation. The findings have important implications for practitioners and policymakers. © 2010 Academy of International Business All rights reserved.