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Productivity spillovers from foreign direct investment in Chinese industries

Author

Listed:
  • Jingjing Yang
  • Helian Xu
  • Chengang Wang
  • Mingyong Lai
  • Yingqi Wei

Abstract

This paper investigates productivity spillover effects of FDI and relates it to the capital- or labour-intensive nature of the industry. Using a panel data set of 35 industries in China, it shows that the presence and magnitude of FDI spillover effects vary by different channels and the nature of the industry. On average, FDI has no horizontal spillover effects but has positive backward linkage effects. However, there are substantial differences in FDI spillover effects via demonstration, competition and labour mobility between capital- and labour-intensive industries. The findings have important policy implications.

Suggested Citation

  • 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.
  • Handle: RePEc:taf:jocebs:v:7:y:2009:i:4:p:429-446
    DOI: 10.1080/14765280903332314
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    References listed on IDEAS

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    1. Daniel H. Rosen, 1999. "Behind the Open Door: Foreign Enterprises in the Chinese Marketplace," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 23.
    2. 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.
    3. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Y Wei & X Liu, 2006. "Productivity spillovers from R&D, exports and FDI in China's manufacturing sector," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(4), pages 544-557, July.
    2. Buckley, Peter J. & Wang, Chengqi & Clegg, Jeremy, 2007. "The impact of foreign ownership, local ownership and industry characteristics on spillover benefits from foreign direct investment in China," International Business Review, Elsevier, vol. 16(2), pages 142-158, April.
    3. Alyson Ma, 2006. "Export Spillovers to Chinese Firms: Evidence from Provincial Data," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 4(2), pages 127-149.
    4. Patibandla, Murali & Sanyal, Amal, 2005. "Foreign Investment and Productivity: A Study of Post-reform Indian Industry," Review of Applied Economics, Review of Applied Economics, vol. 1(1).
    5. Mário Augusto Bertella & Gilberto Tadeu Lima, 2003. "Investimento Direto Externo, Acumulação de Capital Produtivo e Distribuição de Renda: uma Abordagem Pós-Keynesiana," Anais do XXXI Encontro Nacional de Economia [Proceedings of the 31st Brazilian Economics Meeting] a06, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    6. Sapienza, Elvira, 2010. "FDI and Growth in Eastern Europe: A Sectoral Analysis - Investimenti diretti e crescita in est-Europa: un’analisi settoriale," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 63(4), pages 451-475.
    7. Wen-Chung Hsu & Xingbo Gao & Jianhua Zhang & Hsin Mei Lin, 2011. "The effects of outward FDI on home-country productivity: Do location of investment and market orientation matter?," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 4(2), pages 99-116, June.
    8. Georgios Fotopoulos & Helen Louri, 2004. "Firm Growth and FDI: Are Multinationals Stimulating Local Industrial Development?," Journal of Industry, Competition and Trade, Springer, vol. 4(3), pages 163-189, September.
    9. Tomáš Havránek & Zuzana Iršová, 2010. "Meta-Analysis of Intra-Industry FDI Spillovers: Updated Evidence," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 60(2), pages 151-174, May.
    10. Uppenberg, Kristian & Riess, Armin, 2004. "Determinants and growth effects of foreign direct investment," EIB Papers 3/2004, European Investment Bank, Economics Department.

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