The Impact of Hong Kong, Macao and Taiwan Investment on Enterprise Innovation in the Pearl River Delta Region

Based on the micro-enterprise data of the nine cities in the PRD in the database of China’s industrial enterprises from 1998 to 2007, from two aspects of innovation input and innovation output, this article analyzes the impact of Hong Kong, Macao and Taiwan capital entering the Pearl River Delta region on the innovation capabilities of enterprises in the region. The empirical results show that at the enterprise level, the company’s R & D investment and new product output decrease with the increase of Hong Kong, Macao and Taiwan capital entry. At the industry level, the deeper the entry of Hong Kong, Macao and Taiwan-funded industries, the stronger the inhibitory effect on corporate R & D investment and new product output. Combining the results of these two aspects, the estimation results of this article show that the entry of Hong Kong, Macao and Taiwan capital into the Pearl River Delta region has a negative effect on the innovation ability of enterprises.