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Mutual productivity spillovers between foreign and local firms in China

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  • Yingqi Wei
  • Xiaming Liu
  • Chengang Wang

Abstract

The existing literature treats advanced technology sourcing as the only cause of reverse productivity spillovers from local to foreign firms and implies that mutual spillovers between foreign and local firms can only happen in the developed world. This paper argues that the diffusion of indigenous technology and local knowledge helps the productivity enhancement of multinationals, so that there can be mutual spillovers even in a developing country. The results from a large-sample firm-level econometric analysis and a comparative case study of seven companies in Chinese manufacturing support this new argument, as mutual spillovers are identified between local Chinese firms and overseas Chinese or OECD-invested firms. Copyright The Author 2008. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.

Suggested Citation

  • Yingqi Wei & Xiaming Liu & Chengang Wang, 2008. "Mutual productivity spillovers between foreign and local firms in China," Cambridge Journal of Economics, Oxford University Press, vol. 32(4), pages 609-631, July.
  • Handle: RePEc:oup:cambje:v:32:y:2008:i:4:p:609-631
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    Cited by:

    1. repec:bla:worlde:v:40:y:2017:i:11:p:2354-2377 is not listed on IDEAS
    2. Laixiang Sun & Eunsuk Hong & Tao Li, 2010. "Incorporating Technology Diffusion, Factor Mobility And Structural Change Into Cross-Region Growth Regression: An Application To China," Journal of Regional Science, Wiley Blackwell, vol. 50(3), pages 734-755.
    3. Zámborský Peter & Jacobs Elena J., 2016. "Reverse Productivity Spillovers in the OECD: The Contrasting Roles of R&D and Capital," Global Economy Journal, De Gruyter, vol. 16(1), pages 113-133, March.
    4. Shahid Yusuf & Kaoru Nabeshima, 2009. "Growth through Innovation : An Industrial Strategy for Shanghai," World Bank Other Operational Studies 18613, The World Bank.
    5. Canan Mutlu & Wu Zhan & Mike Peng & Zhiang Lin, 2015. "Competing in (and out of) transition economies," Asia Pacific Journal of Management, Springer, vol. 32(3), pages 571-596, September.
    6. repec:eee:enepol:v:108:y:2017:i:c:p:684-695 is not listed on IDEAS
    7. Arijit Mukherjee & Uday Bhanu Sinha, 2013. "Patent Protection, Southern Innovation and Welfare in a North–South Trade Model," Economica, London School of Economics and Political Science, vol. 80(318), pages 248-273, April.
    8. Wignaraja, Ganeshan, 2008. "FDI and Innovation as Drivers of Export Behaviour: Firm-level Evidence from East Asia," MERIT Working Papers 061, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    9. Wignaraja, Ganeshan, 2013. "Understanding Innovation in Production Networks in East Asia," ADBI Working Papers 410, Asian Development Bank Institute.
    10. Li, Xiaoying & Wang, Jue & Liu, Xiaming, 2013. "Can locally-recruited R&D personnel significantly contribute to multinational subsidiary innovation in an emerging economy?," International Business Review, Elsevier, vol. 22(4), pages 639-651.
    11. Jingjing Yang & Helian Xu & Chengang Wang & Mingyong Lai & Yingqi Wei, 2009. "Productivity spillovers from foreign direct investment in Chinese industries," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 7(4), pages 429-446.
    12. Liu, Kelly & Daly, Kevin & Varua, Maria Estela, 2014. "Analysing China's foreign direct investment in manufacturing from a high–low technology perspective," Emerging Markets Review, Elsevier, vol. 21(C), pages 82-95.
    13. Yabin Zhang & Jiang Wu & Hongshan Ai, 2009. "The technology gap and the limit of imitation: An inspection of the strategy of 'exchanging market for technology'," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 7(4), pages 447-455.
    14. Mathew, Anuj Joshua & Mukherjee, Arijit, 2014. "Intellectual property rights, southern innovation and foreign direct investment," International Review of Economics & Finance, Elsevier, vol. 31(C), pages 128-137.
    15. Schleich, Joachim & Walz, Rainer & Ragwitz, Mario, 2017. "Effects of policies on patenting in wind-power technologies," Energy Policy, Elsevier, vol. 108(C), pages 684-695.
    16. Simon Falck, 2016. "Foreign-to-domestic labour mobility in Sweden," Regional Science Policy & Practice, Wiley Blackwell, vol. 8(3), pages 111-125, August.
    17. Lo, Dic & Hong, Fuhai & Li, Guicai, 2016. "Assessing the role of inward foreign direct investment in Chinese economic development, 1990–2007: Towards a synthesis of alternative views," Structural Change and Economic Dynamics, Elsevier, vol. 37(C), pages 107-120.
    18. Gao, Lan & Liu, Xiaohui & Zou, Huan, 2013. "The role of human mobility in promoting Chinese outward FDI: A neglected factor?," International Business Review, Elsevier, vol. 22(2), pages 437-449.
    19. repec:spr:manint:v:54:y:2014:i:2:d:10.1007_s11575-013-0195-y is not listed on IDEAS
    20. Walz, Rainer & Helfrich, Nicki & Enzmann, Alexander, 2009. "A system dynamics approach for modelling a lead-market-based export potential," Working Papers "Sustainability and Innovation" S3/2009, Fraunhofer Institute for Systems and Innovation Research (ISI).
    21. repec:spr:manint:v:54:y:2014:i:2:d:10.1007_s11575-013-0185-0 is not listed on IDEAS
    22. Wang, Jue & Liu, Xiaming & Li, Xiaoying, 2009. "A dual-role typology of multinational subsidiaries," International Business Review, Elsevier, vol. 18(6), pages 578-591, December.
    23. Mehdi Chowdhury & Arijit Mukherjee, 2016. "Labour Market Integration and Innovation: The Implications on Consumers," Manchester School, University of Manchester, vol. 84(6), pages 771-794, December.
    24. repec:pal:jintbs:v:48:y:2017:i:6:d:10.1057_s41267-017-0083-y is not listed on IDEAS

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