What Determines Technological Spillovers of Foreign Direct Investment: Evidence from China
Galina Hale and
Cheryl Long (cxlong@mail.colgate.edu)
Additional contact information
Cheryl Long: Colgate University
Working Papers from Economic Growth Center, Yale University
Abstract:
Using the World Bank survey of 1500 firms in five Chinese cities, we study whether the presence of foreign firms produces technology spillovers on domestic firms operating in the same city and industry. We find positive spillovers for more backward firms. We analyze the channels of such spillovers and find that the transfer of technology occurs through movement of high-skilled workers from FDI firms to domestic firms as well as through network externalities among high-skilled workers. Moreover, these two channels fully account for the spillover effects we find, which demonstrate the importance of well-functioning labor market in facilitating FDI spillovers. Insofar as our results can be generalized to other countries, they reconcile conflicting evidence found in other studies.
Keywords: Foreign direct investment; technological spillovers; labor mobility; network externalities; China (search for similar items in EconPapers)
JEL-codes: F2 J2 J6 O1 O3 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2006-04
New Economics Papers: this item is included in nep-cna, nep-dev, nep-ino, nep-net and nep-tra
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Citations: View citations in EconPapers (33)
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Working Paper: What Determines Technological Spillovers of Foreign Direct Investment: Evidence from China (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:egc:wpaper:934
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