FDI and spillovers in China: non-linearity and absorptive capacity

Taotao Chen, Ari Kokko and Patrik Tingvall

Journal of Chinese Economic and Business Studies, 2011, vol. 9, issue 1, 1-22

Abstract: Using a fixed effect variance decomposition model we estimate SUR models to analyse FDI spillovers from contagion and spillovers from competition on local firms in China. While the former type of spillover mainly depends on the degree of foreign presence, the latter kind is related to how foreign and local firms interact. The main conclusion is that FDI has been beneficial for the Chinese economy but that spillovers are not evenly distributed across firms and industries. Spillovers from contagion tend to exhibit an inverse U-shaped pattern with respect to the degree of foreign presence at the industry level, whereas spillovers from competition are more linear. Industries with high absorptive capacity and/or high efficiency are the ones best equipped to take advantage of spillovers from foreign-owned firms.

Keywords: spillovers; China; FDI; fixed effect variance decomposition (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/14765284.2011.542882 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: FDI AND SPILLOVERS IN CHINA: NON-LINEARITY AND ABSORPTIVE CAPACITY (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jocebs:v:9:y:2011:i:1:p:1-22

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RCEA20

DOI: 10.1080/14765284.2011.542882

Access Statistics for this article

Journal of Chinese Economic and Business Studies is currently edited by Professor Xiaming Liu

More articles in Journal of Chinese Economic and Business Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().