Does Foreign-Funded Enterprises' Open Innovation Help Achieve the Goal of "Stabilizing Foreign Investment"?—A Perspective on Production Linkages between Domestic and Foreign-Funded Enterprises in Global Value Chains

Using the OECD Inter-Country Input-Output Tables by enterprise ownership and Chinese patent data, this paper examines, at the manufacturing-industry level, the impact of open innovation by foreign-funded enterprises on production linkages between domestic and foreign-funded enterprises in global value chains and assesses whether it contributes to the important strategic goal of "stabilizing foreign investment." The results show that open innovation by foreign-funded enterprises significantly strengthens such production linkages, thereby helping stabilize foreign investment. In terms of mechanisms, it reinforces these linkages through three channels—the innovation promotion effect, the supply chain optimization effect, and the industrial supporting effect—thus advancing the realization of the important strategic goal of stabilizing foreign investment. Further analysis reveals that open innovation by foreign-funded enterprises can strengthen their strategic-asset-seeking and market-seeking motivations; the strength of intellectual property protection has no significant negative moderating effect on the relationship between such open innovation and production linkages between domestic and foreign-funded enterprises in global value chains; and within-industry open innovation by foreign-funded enterprises has a greater impact on these linkages.