Technological upgrading in Chinese cities: the roles of FDI, pace and rhythm

Previously, most literature has argued that FDI spillovers aredependent upon the degree of foreign presence in host regions,but often neglected FDI expansion time-based characteristics’roles. This paper therefore develops the constructs of pace andrhythm as key features of foreign expansion process. It moves theconcept of time compression diseconomies beyond the firm levelto cities, and hopes to investigate how technological upgrading inone region is influenced by the FDI expansion process. Based onthe panel data set of 244 Chinese cities over 2004–2011, ourresults illustrate that irregular and unpredictable foreignexpansions significantly diminish FDI spillovers in Chinese cities,and it also directly impedes technological upgrading in local area. Rapid foreign expansion process itself impedes technologicalupgrading, but it significantly enhances technology transfers anddisseminations of FDI in Chinese cities. Moreover, this paper alsoprovides implications to contribute to the theoretical framework,and helps policy-makers’ decision-making