Heterogeneity and curvilinearity of FDI-related productivity spillovers in China's manufacturing sector

Sajid Anwar and Sizhong Sun

Economic Modelling, 2014, vol. 41, issue C, 23-32

Abstract: Earlier studies on foreign direct investment (FDI) have mainly focused on its benefits. This paper examines the nature of FDI-related productivity spillovers in China's manufacturing sector. The empirical analysis based on firm level panel data, over the period 2000–2007, reveals that productivity spillovers arising from FDI from Hong Kong, Macau and Taiwan exhibit not only heterogeneity but also curvilinearity. The size of the spillovers depends on firm age, capital intensity and ownership structure. We find that FDI-related spillovers from the rest of the world are heterogeneous but not curvilinear. We find that the size of productivity spillovers depends on firm size and product quality. The analysis presented in this paper sheds some light on the complex pattern of FDI-related spillovers.

Keywords: FDI; Productivity spillovers; Heterogeneity; Curvilinearity; China's manufacturing sector; Panel data analysis (search for similar items in EconPapers)
JEL-codes: F21 F23 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:41:y:2014:i:c:p:23-32

DOI: 10.1016/j.econmod.2014.03.021

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