The Spatial Dimension of Trade- and FDI-driven Productivity Growth in Chinese Provinces – A Global Cointegration Approach
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
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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.
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Length: 31 pages
Date of creation: Jan 2012
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Handle: RePEc:rwi:repape:0308
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Related research
Keywords: Trade; FDI; productivity growth; spatial spillovers; China;Find related papers by JEL classification:
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
- R10 - Urban, Rural, Regional and Transportation Economics - - General Regional Economics - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-21 (All new papers)
- NEP-GEO-2012-03-21 (Economic Geography)
- NEP-INT-2012-03-21 (International Trade)
- NEP-TRA-2012-03-21 (Transition Economics)
References
References listed on IDEASPlease 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.:
- 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.
- Eckhardt Bode & Peter Nunnenkamp & Andreas Waldkirch, 2009. "Spatial Effects of Foreign Direct Investment in US States," Kiel Working Papers 1535, Kiel Institute for the World Economy.
- Luosha Du & Ann Harrison & Gary Jefferson, 2011.
"Do Institutions Matter for FDI Spillovers? The Implications of China’s “Special Characteristics”,"
Working Papers
33, Brandeis University, Department of Economics and International Businesss School.
- Luosha Du & Ann Harrison & Gary Jefferson, 2011. "Do Institutions Matter for FDI Spillovers? The Implications of China's "Special Characteristics"," NBER Working Papers 16767, National Bureau of Economic Research, Inc.
- Du, Luosha & Harrison, Ann & Jefferson, Gary, 2011. "Do institutions matter for FDI spillovers ? the implications of China's"special characteristics"," Policy Research Working Paper Series 5757, The World Bank.
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