1. ¹Loughborough University Business School, UK
2. ²Guanghua School of Management, Peking University, Beijing, China
3. ³Sir John Cass Business School, City University London, London, UK
4. ⁴Centre for Management Buy-out Research, Nottingham University Business School, Nottingham, UK

Correspondence: X Liu, Loughborough University Business School, Loughborough LE11 3TU, UK. Tel: +44 (0)150 922 3349; Fax: +44 (0)150 922 3360

Received 25 February 2008; Revised 4 March 2009; Accepted 27 March 2009; Published online 8 October 2009.

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 R&D 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.