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Spatial spillovers from FDI agglomeration : evidence from the Yangtze River Delta in China

  • Tanaka, Kiyoyasu
  • Hashiguchi, Yoshihiro

Foreign firms have clustered together in the Yangtze River Delta, and their impact on domestic firms is an important policy issue. This paper studies the spatial effect of FDI agglomeration on the regional productivity of domestic firms, using Chinese firm-level data. To identify local FDI spillovers, we estimate the causal impact of foreign firms on domestic firms in the same county and similar industries. We then estimate a spatial-autoregressive model to examine spatial spillovers from FDI clusters to other domestic firms in distant counties. Our results show that FDI agglomeration generates positive spillovers for domestic firms, which are stronger in nearby areas than in distant areas.

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File URL: http://ir.ide.go.jp/dspace/bitstream/2344/1179/1/ARRIDE_Discussion_No.354_tanaka.pdf
File Function: First version, 2012
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Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 354.

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Date of creation: Jun 2012
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Publication status: Published in IDE Discussion Paper. No. 354. 2012.6
Handle: RePEc:jet:dpaper:dpaper354
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