In particular, economic globalization correlates to greater technological innovation in private-owned enterprise, a lower one in stated-owned enterprises, and an insignificant one in foreign-owned enterprises. Interestingly, through subsample analysis the findings indicate that globalization expresses a distinct relationship with firms’ innovation performance. More specifically, economic, social, and political globalization, present positive impacts on technological innovation. The empirical findings suggest that overall provincial globalization is associated with better innovation performance for Chinese firms. This paper investigates the effect of globalization on innovation by using a combined dataset of 596809 Chinese manufacturing firms with 1,993,154 observations and provincial globalization indices from 1998 to 2009.
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