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Spillovers from Taiwan, Hong Kong, and Macau Investment and from Other Foreign Investment in Chinese Industries

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  • Jr-Tsung Huang

Abstract

In its analysis of the impact of foreign investment on China's productivity, this article develops two empirical models: one using labor productivity and the other using total factor productivity (TFP). Using cross-provincial data on Chinese industries for 1993, 1994, and 1997 to regress the empirical models, it is concluded that the impact of investment differed depending on its source, with that from these overseas Chinese enterprises contributing to the spillover effect in regions with a high technology gap, whereas that from other foreign enterprises tending to improve productivity and TFP primarily in regions with a low technology gap. (JEL "D24", "F13", "F15", "L60") Copyright 2004 Western Economic Association International.

Suggested Citation

  • Jr-Tsung Huang, 2004. "Spillovers from Taiwan, Hong Kong, and Macau Investment and from Other Foreign Investment in Chinese Industries," Contemporary Economic Policy, Western Economic Association International, vol. 22(1), pages 13-25, January.
  • Handle: RePEc:bla:coecpo:v:22:y:2004:i:1:p:13-25
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    References listed on IDEAS

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    1. Jefferson, Gary H. & Rawski, Thomas G. & Li, Wang & Yuxin, Zheng, 2000. "Ownership, Productivity Change, and Financial Performance in Chinese Industry," Journal of Comparative Economics, Elsevier, vol. 28(4), pages 786-813, December.
    2. Q. Zhang & B. Felmingham, 2002. "The Role of FDI, Exports and Spillover Effects in the Regional Development of China," Journal of Development Studies, Taylor & Francis Journals, vol. 38(4), pages 157-178.
    3. Grossman, Gene M & Helpman, Elhanan, 1990. "Trade, Innovation, and Growth," American Economic Review, American Economic Association, vol. 80(2), pages 86-91, May.
    4. Dees, Stephane, 1998. "Foreign Direct Investment in China: Determinants and Effects," Economic Change and Restructuring, Springer, vol. 31(2-3), pages 175-194.
    5. Edwin Mansfield & Anthony Romeo, 1980. "Technology Transfer to Overseas Subsidiaries by U. S.-Based Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 95(4), pages 737-750.
    6. 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.
    7. Kokko, Ari, 1994. "Technology, market characteristics, and spillovers," Journal of Development Economics, Elsevier, vol. 43(2), pages 279-293, April.
    8. Brun, J. F. & Combes, J. L. & Renard, M. F., 2002. "Are there spillover effects between coastal and noncoastal regions in China?," China Economic Review, Elsevier, vol. 13(2-3), pages 161-169.
    9. Yih-Chyi Chuang & Chi-Mei Lin, 1999. "Foreign direct investment, R&D and spillover efficiency: Evidence from Taiwan's manufacturing firms," Journal of Development Studies, Taylor & Francis Journals, vol. 35(4), pages 117-137.
    10. W, Y, 1995. "Productivity Growth, Technological Progress, and Technical Efficiency Change in China: A Three-Sector Analysis1," Journal of Comparative Economics, Elsevier, vol. 21(2), pages 207-229, October.
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    Citations

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    Cited by:

    1. Yuyuan Wen, 2014. "The spillover effect of FDI and its impact on productivity in high economic output regions: A comparative analysis of the Yangtze River Delta and the Pearl River Delta, China," Papers in Regional Science, Wiley Blackwell, vol. 93(2), pages 341-365, June.
    2. Kun Jiang & Wolfgang Keller & Larry D. Qiu & William Ridley, 2018. "International Joint Ventures and Internal vs. External Technology Transfer: Evidence from China," NBER Working Papers 24455, National Bureau of Economic Research, Inc.
    3. Chen, George S. & Yao, Yao & Malizard, Julien, 2017. "Does foreign direct investment crowd in or crowd out private domestic investment in China? The effect of entry mode," Economic Modelling, Elsevier, vol. 61(C), pages 409-419.
    4. Rossitza B. Wooster & David S. Diebel, 2010. "Productivity Spillovers from Foreign Direct Investment in Developing Countries: A Meta-Regression Analysis," Review of Development Economics, Wiley Blackwell, vol. 14(s1), pages 640-655, August.
    5. Theresa M. Greaney & Yao Li, 2013. "Trade, Foreign Direct Investment and Wage Inequality in China: A Heterogeneous Firms Approach," China Economic Policy Review (CEPR), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 1-49.
    6. Birte Pfeiffer & Holger Goerg & Lucia Perez-Villar, 2014. "The Heterogeneity of FDI in Sub-Saharan Africa – How Do the Horizontal Productivity Effects of Emerging Investors Differ from Those of Traditional Players?," GIGA Working Paper Series 262, GIGA German Institute of Global and Area Studies.
    7. Ying Zhou & Sukanlaya Sawang & Xiaohua Yang, 2016. "Understanding The Regional Innovation Capacity In China After Economic Reforms," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(06), pages 1-36, August.
    8. Ito, Banri & Yashiro, Naomitsu & Xu, Zhaoyuan & Chen, XiaoHong & Wakasugi, Ryuhei, 2012. "How do Chinese industries benefit from FDI spillovers?," China Economic Review, Elsevier, vol. 23(2), pages 342-356.
    9. repec:bla:worlde:v:40:y:2017:i:10:p:2056-2077 is not listed on IDEAS
    10. Natasha Agarwal & Chris Milner, "undated". "FDI Spillovers in China – Connecting the Missing Link between Micro and Macro," Discussion Papers 11/20, University of Nottingham, GEP.
    11. Lin, Faqin, 2015. "Learning by exporting effect in China revisited: An instrumental Approach," China Economic Review, Elsevier, vol. 36(C), pages 1-13.
    12. Theresa M. Greaney & Yao Li, 2017. "Examining Determinants of Foreign Wage Premiums in China," The World Economy, Wiley Blackwell, vol. 40(10), pages 2056-2077, October.

    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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