Advanced Search
MyIDEAS: Login

The Spatial Dimension of Trade- and FDI-driven Productivity Growth in Chinese Provinces – A Global Cointegration Approach

Contents:

Author Info

  • Selin Özyurt
  • Timo Mitze

    ()

Abstract

Since the introduction of its “open door” policy in the late 1970s, China has been attracting a growing share of FDI inflows and its international trade integration has advanced considerably. In this study, we take a closer look at the regional growth impact of the Chinese internationalization activity on labour productivity over the period 1979-2006. Our empirical analysis thereby extends the existing empirical literature by considering the likely spatial effects associated with Trade- and FDI-led growth in a dynamic error correction modelling framework. Our results indicate that, in the long-run relationship, regional labour productivity is indeed driven by direct and indirect spatial effects of FDI and trade activity next to further supply side factors such as the regional infrastructure equipment and human capital endowment. Similarly, in the short-run, changes in FDI activity and especially human capital variables are found to matter for the regional growth dynamics.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://repec.rwi-essen.de/files/REP_12_308.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0308.

as in new window
Length: 31 pages
Date of creation: Jan 2012
Date of revision:
Handle: RePEc:rwi:repape:0308

Contact details of provider:
Postal: Hohenzollernstraße 1-3, 45128 Essen
Phone: (0201)8149-0
Fax: (0201)8149-200
Email:
Web page: http://www.rwi-essen.de/
More information through EDIRC

Order Information:
Web: http://www.rwi-essen.de/publikationen/

Related research

Keywords: Trade; FDI; productivity growth; spatial spillovers; China;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Dapeng Hu & Masahisa Fujita, 2001. "Regional disparity in China 1985-1994: The effects of globalization and economic liberalization," The Annals of Regional Science, Springer, vol. 35(1), pages 3-37.
  2. Xu, Bin, 2000. "Multinational enterprises, technology diffusion, and host country productivity growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 477-493, August.
  3. Blonigen, Bruce A. & Davies, Ronald B. & Waddell, Glen R. & Naughton, Helen T., 2007. "FDI in space: Spatial autoregressive relationships in foreign direct investment," European Economic Review, Elsevier, vol. 51(5), pages 1303-1325, July.
  4. Haddad, Mona & Harrison, Ann, 1993. "Are there positive spillovers from direct foreign investment? : Evidence from panel data for Morocco," Journal of Development Economics, Elsevier, vol. 42(1), pages 51-74, October.
  5. Michael Beenstock & Daniel Felsenstein, 2010. "Spatial error correction and cointegration in nonstationary panel data: regional house prices in Israel," Journal of Geographical Systems, Springer, vol. 12(2), pages 189-206, June.
  6. Eckhardt Bode & Peter Nunnenkamp & Andreas Waldkirch, 2012. "Spatial effects of foreign direct investment in US states," Canadian Journal of Economics, Canadian Economics Association, vol. 45(1), pages 16-40, February.
  7. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
  8. Ari Kokko, 1996. "Productivity spillovers from competition between local firms and foreign affiliates," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(4), pages 517-530.
  9. Lee, Lung-fei & Yu, Jihai, 2010. "Estimation of spatial autoregressive panel data models with fixed effects," Journal of Econometrics, Elsevier, vol. 154(2), pages 165-185, February.
  10. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
  11. Cem Ertur & Wilfried Koch, 2007. "Growth, technological interdependence and spatial externalities: theory and evidence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(6), pages 1033-1062.
  12. Magnus Blomstrom & Fredrik Sjoholm, 1998. "Technology Transfer and Spillovers? Does Local Participation with Multinationals Matter?," NBER Working Papers 6816, National Bureau of Economic Research, Inc.
  13. Sebastian Edwards, 1997. "Openness, Productivity and Growth: What Do We Really Know?," NBER Working Papers 5978, National Bureau of Economic Research, Inc.
  14. Nicolaas Groenewold & Guoping Lee & Anping Chen, 2005. "Regional Output Spillovers in China: Estimates from a VAR Model," Economics Discussion / Working Papers 05-05, The University of Western Australia, Department of Economics.
  15. Yang, Ling & Lahr, Michael L., 2010. "Sources of Chinese labor productivity growth: A structural decomposition analysis, 1987-2005," China Economic Review, Elsevier, vol. 21(4), pages 557-570, December.
  16. Baltagi B-H & Bresson G. & Pirotte A., 2005. "Panel Unit Root Tests and Spatial Dependence," Working Papers ERMES 0503, ERMES, University Paris 2.
  17. Stanislav Stakhovych & Tammo H.A. Bijmolt, 2009. "Specification of spatial models: A simulation study on weights matrices," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 389-408, 06.
  18. Wang, Jian-Ye & Blomstrom, Magnus, 1992. "Foreign investment and technology transfer : A simple model," European Economic Review, Elsevier, vol. 36(1), pages 137-155, January.
  19. Jiang, Yanqing, 2011. "Understanding openness and productivity growth in China: An empirical study of the Chinese provinces," China Economic Review, Elsevier, vol. 22(3), pages 290-298, September.
  20. Selin Özyurt & Marie Daumal, 2013. "Trade openness and regional income spillovers in Brazil: A spatial econometric approach," Papers in Regional Science, Wiley Blackwell, vol. 92(1), pages 197-215, 03.
  21. Luosha Du & Ann Harrison & Gary Jefferson, 2011. "FDI Spillovers and Industrial Policy: The Role of Tariffs and Tax Holidays," NBER Working Papers 16767, National Bureau of Economic Research, Inc.
  22. Miguel Márquez & Julián Ramajo & Geoffrey Hewings, 2010. "A spatio-temporal econometric model of regional growth in Spain," Journal of Geographical Systems, Springer, vol. 12(2), pages 207-226, June.
  23. Keller, Wolfgang & Shiue, Carol Hua, 2003. "The Origins of Spatial Interaction," CEPR Discussion Papers 4138, C.E.P.R. Discussion Papers.
  24. S. de Silva & K. Hadri & A. R. Tremayne, 2009. "Panel unit root tests in the presence of cross-sectional dependence: finite sample performance and an application," Econometrics Journal, Royal Economic Society, vol. 12(2), pages 340-366, 07.
  25. Cletus C. Coughlin & Eran Segev, 2000. "Foreign Direct Investment in China: A Spatial Econometric Study," The World Economy, Wiley Blackwell, vol. 23(1), pages 1-23, 01.
  26. Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
  27. Maria Abreu Henri L. F. de Groot & Raymond J. G. M. Florax, 2005. "A Meta-Analysis of β-Convergence: the Legendary 2%," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 389-420, 07.
  28. Miguel Márquez & Julián Ramajo & Geoffrey Hewings, 2010. "Measuring the spillover effects of public capital: a bi-regional structural vector autoregressive analysis," Letters in Spatial and Resource Sciences, Springer, vol. 3(3), pages 111-125, October.
  29. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:rwi:repape:0308. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabine Weiler).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.