How Does the Productivity of Foreign Direct Investment Spill over to Local Firms in Chinese Manufacturing?

Adam Blake (), Ziliang Deng and Rodney Falvey

Discussion Papers from University of Nottingham, GEP

Abstract: We use a firm-level dataset for Chinese manufacturing, to estimate productivity spillovers from foreign direct investment (FDI) to local firms. The spillover channels considered include inter-firm labour turnover/mobility; vertical input-output linkages; exporting externalities; and horizontal effects. The roles of these channels are dependent on various factors including export propensity, R&D expenditure per capita, employee training, and ownership structure. We find that export of MNEs is the most prominent spillover channel. Labour turnover and horizontal demonstration and competition bring positive spillovers to SOEs but not to local private firms. Vertical linkages are not found to be significant.

Keywords: productivity spillover; foreign direct investment (FDI); labour mobility/turnover; linkages; export (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (20)

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Journal Article: How does the productivity of foreign direct investment spill over to local firms in Chinese manufacturing? (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notgep:09/03

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