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Regional Innovation and Spillover Effects of Foreign Direct Investment in China: A Threshold Approach

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  • Lingyun Huang
  • Xiaming Liu
  • Lei Xu

Abstract

Huang L., Liu X. and Xu L. Regional innovation and spillover effects of foreign direct investment in China: a threshold approach, Regional Studies . Using a data set on twenty-nine Chinese provinces for the period 1985--2008, this paper establishes a threshold model to analyse the relationship between spillover effects of foreign direct investment (FDI) and regional innovation in China. There is clear evidence of double-threshold effects of regional innovation on productivity spillovers from FDI. Specifically, only when the level of regional innovation reaches the minimum innovation threshold will FDI in the region begin to produce positive productivity spillovers. Furthermore, positive productivity spillovers from FDI will be substantial only when the level of regional innovation attains a higher threshold. The double threshold divides Chinese provinces into three super-regions in terms of innovation, with most provinces positioned within the middle-level innovation super-region. Policy implications are discussed. Huang L., Liu X. et Xu L. L'innovation r�gionale et les retomb�es de l'investissement direct �tranger en Chine: une façon de seuil, Regional Studies . Employant un ensemble de donn�es pour vingt-neuf provinces en Chine sur la p�riode de 1985 à 2008, cet article cherche à construire un modèle de seuil afin d'analyser le rapport entre les retomb�es de l'investissement direct �tranger (IDE) et de l'innovation r�gionale en Chine. Tout indique que l'innovation a des effets de seuil à deux degr�s sur les retomb�es de productivit� de l'IDE. Notamment, l'IDE r�gional ne va produire des retomb�es de productivit� positives qu'au moment où le niveau de l'innovation r�gionale atteint le seuil d'innovation minimum. En outre, les retomb�es de productivit� positives de l'IDE ne seront importantes que si le niveau de l'innovation r�gionale atteint un seuil plus �lev�. Quant à l'innovation, le seuil à deux degr�s divise les provinces chinoises en trois grandes r�gions, dont la plupart sont situ�es au sein de la grande r�gion de rang moyen pour l'innovation. On discute des implications pour la politique. Investissement direct �tranger Retomb�es de productivit� Innovation r�gionale Modèle de seuil Chine Huang L., Liu X. und Xu L. Regionale Innovation und Übertragungseffekte von ausländischen Direktinvestitionen in China: ein Schwellenansatz, Regional Studies . In diesem Beitrag entwickeln wir mit Hilfe eines Datensatzes von 29 chinesischen Provinzen für den Zeitraum von 1985 bis 2008 ein Schwellenmodell zur Analyse der Beziehungen zwischen Übertragungseffekten von ausländischen Direktinvestitionen und der regionalen Innovation in China. Es liegen klare Anzeichen für doppelte Schwelleneffekte der regionalen Innovation auf Produktivitätsübertragungen von ausländischen Direktinvestitionen vor. Insbesondere beginnen ausländische Direktinvestitionen in der Region nur dann positive Produktivitätsübertragungen zu erzeugen, wenn das Niveau der regionalen Innovation die minimale Innovationsschwelle erreicht. Darüber hinaus belaufen sich die positiven Produktivitätsübertragungen durch ausländische Direktinvestitionen nur dann auf eine erhebliche Höhe, wenn das Niveau der regionalen Innovation eine höhere Schwelle erreicht. Die doppelte Schwelle teilt die chinesischen Provinzen hinsichtlich der Innovation in drei Superregionen auf, wobei sich die meisten Provinzen in der Superregion mit Innovation auf mittlerer Ebene befinden. Wir erörtern die Auswirkungen auf die Politik. Ausländische Direktinvestitionen Produktivitätsübertragungen Re gionale Innovation Schwellenmodell China Huang L., Liu X. y Xu L. Innovación regional y efectos de desbordamiento de la inversión extranjera directa en China: un enfoque de umbral, Regional Studies . Con ayuda de un grupo de datos sobre veintinueve provincias de China durante el periodo de 1985 a 2008, en este art�culo establecemos un modelo umbral para analizar la relación entre los efectos de desbordamiento de la inversión extranjera directa (IED) y la innovación regional en China. Existen claras evidencias de efectos de umbral doble de la innovación regional en cuanto a los desbordamientos de productividad de la IED. En concreto, solamente cuando el nivel de la innovación regional alcanza el umbral m�nimo de innovación empezará la IED en la región a producir desbordamientos positivos de productividad. Asimismo, los desbordamientos positivos de productividad de la IED serán solamente considerables cuando el nivel de la innovación regional alcance un umbral más alto. El umbral doble divide las provincias chinas en tres super regiones en t�rminos de innovación, situando a la mayor�a de provincias dentro de la super región con una innovación de nivel medio. Asimismo analizamos las repercusiones pol�ticas. Inversión directa extranjera Desbordamientos de productividad Innovación regional Modelo umbral China

Suggested Citation

  • Lingyun Huang & Xiaming Liu & Lei Xu, 2012. "Regional Innovation and Spillover Effects of Foreign Direct Investment in China: A Threshold Approach," Regional Studies, Taylor & Francis Journals, vol. 46(5), pages 583-596, August.
  • Handle: RePEc:taf:regstd:v:46:y:2012:i:5:p:583-596
    DOI: 10.1080/00343404.2010.520694
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    References listed on IDEAS

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    1. Ari Kokko & Victoria Kravtsova, 2008. "Innovative capability in MNC subsidiaries: evidence from four European transition economies," Post-Communist Economies, Taylor & Francis Journals, vol. 20(1), pages 57-75.
    2. Liu, Xiaming & Wang, Chengang & Wei, Yingqi, 2001. "Causal links between foreign direct investment and trade in China," China Economic Review, Elsevier, vol. 12(2-3), pages 190-202.
    3. Davide Castellani & Antonello Zanfei, 2006. "Multinational Firms, Innovation and Productivity," Books, Edward Elgar Publishing, number 3709.
    4. Wakelin, Katharine & Girma, Sourafel, 2001. "Regional Underdevelopment: Is FDI the Solution? A Semiparametric Analysis," CEPR Discussion Papers 2995, C.E.P.R. Discussion Papers.
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