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Spatial spillovers from FDI agglomeration : evidence from the Yangtze River Delta in China

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  • Tanaka, Kiyoyasu
  • Hashiguchi, Yoshihiro

Abstract

Foreign firms have clustered together in the Yangtze River Delta, and their impact on domestic firms is an important policy issue. This paper studies the spatial effect of FDI agglomeration on the regional productivity of domestic firms, using Chinese firm-level data. To identify local FDI spillovers, we estimate the causal impact of foreign firms on domestic firms in the same county and similar industries. We then estimate a spatial-autoregressive model to examine spatial spillovers from FDI clusters to other domestic firms in distant counties. Our results show that FDI agglomeration generates positive spillovers for domestic firms, which are stronger in nearby areas than in distant areas.

Suggested Citation

  • Tanaka, Kiyoyasu & Hashiguchi, Yoshihiro, 2012. "Spatial spillovers from FDI agglomeration : evidence from the Yangtze River Delta in China," IDE Discussion Papers 354, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper354
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    Cited by:

    1. Ming He & Yang Chen & Ron Schramm, 2018. "Technological spillovers in space and firm productivity: Evidence from China’s electric apparatus industry," Urban Studies, Urban Studies Journal Limited, vol. 55(11), pages 2522-2541, August.
    2. Kiyoyasu Tanaka & Yoshihiro Hashiguchi, 2015. "Spatial Spillovers from Foreign Direct Investment: Evidence from the Yangtze River Delta in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 23(2), pages 40-60, March.
    3. María C. Latorre & Nobuhiro Hosoe, 2014. "How much can foreign multinationals affect the Chinese economy? A dynamic general equilibrium analysis of Japanese FDI," GRIPS Discussion Papers 14-16, National Graduate Institute for Policy Studies.
    4. Xu ZHANG, 2013. "Firms’ Location Choices in Guangdong," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 3(11), pages 1414-1434, November.

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    More about this item

    Keywords

    China; Foreign investments; International business enterprises; Productivity; FDI; Multinational firms; Spillovers;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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