Foreign tech firms China buys don't innovate more, but Chinese parents do

A new study shows China's global corporate ownership is far larger than official numbers suggest, reaching $2.1 trillion by 2021. Chinese state-owned firms buy foreign technology companies, but the innovation happens back in China, not at the acquired firm.

For years, countries assumed foreign investment meant more innovation and jobs in the place receiving the money. This paper shows China's state-backed firms are buying companies abroad to bring the technology home, not to boost the acquired firm's output. It means governments will need to rethink how they measure the benefits of foreign investment.