Chinese Universities Mobilise FDI and DDI for the City’s Innovativeness in the ICT Sector

Abstract

We explored whether university populations (intensity) moderate the link between FDI (foreign direct investment) or DDI (domestic direct investment) and the city’s innovativeness in the ICT sector. With the moderating role of universities between resources and the city’s development level, we relied on institutional theory. Institutional theory combines the technical and symbolic concepts (network structure) of the university. With panel data based on 5166 observations from 287 Chinese cities over 18 years (1999 to 2016), we used the maximum likelihood method to test hypotheses for direct and indirect effects. The direct effect of baseline hypotheses represents the FDI and DDI; university intensity has a moderating effect. In the former case, the FDI and DDI positively correlate with the city’s innovativeness in China’s ICT sector. In the latter case, the population of universities in the city positively moderates the relation between these resources and the city’s development level. These findings contributed to the literature at three levels. First, the study contributes to ICT development and the city’s innovativeness in the research context. Second, the study contributes to university intensity as a resource mobilizer in institutional theory, emphasising that interinstitutional interaction supports resource flow for better performance in certain geographical locations. Third, the study contributes to policy- and practice-related issues related to city development, the smart environment, and ICT development as an enabling infrastructure.