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Foreign direct investment and innovation in China's e-commerce sector

Author

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  • Wang, Xin

Abstract

By comparing the business practices and performance of foreign-invested and local Internet companies in China, this article outlines the important factors that multinational corporations must address to gain competitive advantages in China's e-commerce sector. Specifically, this research compares EachNet (eBay) with Taobao in the consumer-to-consumer market; eLong (Expedia) with Ctrip and Joyo (Amazon) with Dangdang in the business-to-consumer market; and the online search engines Google China and Baidu. The author underscores the importance of local knowledge for firm performance and success. Foreign firms must improve their understanding of and ability to adapt to local cultural, social, economic, and political environments.

Suggested Citation

  • Wang, Xin, 2012. "Foreign direct investment and innovation in China's e-commerce sector," Journal of Asian Economics, Elsevier, vol. 23(3), pages 288-301.
    • Handle: RePEc:eee:asieco:v:23:y:2012:i:3:p:288-301
    DOI: 10.1016/j.asieco.2010.11.007
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    References listed on IDEAS

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    1. Brian J. Aitken & Ann E. Harrison, 2022. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 6, pages 139-152, World Scientific Publishing Co. Pte. Ltd..
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    4. Choi, Changkyu, 2003. "Does the Internet stimulate inward foreign direct investment?," Journal of Policy Modeling, Elsevier, vol. 25(4), pages 319-326, June.
    5. Ramamurti, Ravi, 2000. "Risks and rewards in the globalization of telecommunications in emerging economies," Journal of World Business, Elsevier, vol. 35(2), pages 149-170, July.
    6. Wolfgang Keller, 2002. "Geographic Localization of International Technology Diffusion," American Economic Review, American Economic Association, vol. 92(1), pages 120-142, March.
    7. Ko, Kwan Wai, 2007. "Internet externalities and location of foreign direct investment: A comparison between developed and developing countries," Information Economics and Policy, Elsevier, vol. 19(1), pages 1-23, March.
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    Cited by:

    1. Yu Chen & Yuandi Wang & Shan Chen, 2021. "Are Chinese Executives Rewarded or Penalized by the Operation of High-Speed Railways?," Sustainability, MDPI, vol. 13(21), pages 1-14, October.

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    More about this item

    Keywords

    E-commerce; Foreign direct investment; Technology innovation;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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