Productivity Spillovers from Foreign Direct Investment: Firm-Level Evidence from China
Date
2012
Authors
Sheng, Yu
Xu, Xinpeng
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Publisher
Pergamon-Elsevier Ltd
Abstract
Using firm-level census data, this paper examines the spillover effects of foreign direct investment (FDI) on domestic firms in the Chinese manufacturing industry between 2000 and 2003. Our analysis takes into account the endogeniety of input choices, simultaneity bias, and clustering errors that are known to cause biased and inefficient estimations. Our results suggest that positive spillovers from FDI arise from forward linkages where domestic firms purchase high-quality intermediate goods or equipment from foreign firms in the upstream sectors. Our results also show that domestic firms differ significantly in the extent to which they benefit from FDI.
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Keywords
Keywords: firm ownership; foreign direct investment; productivity; spillover effect; China Asia; China; Foreign direct investment; Spillover effects
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Source
World Development
Type
Journal article
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2037-12-31
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