Technology Spillovers of FDI from Different Sources in China——An Empirical Test Based on Simultaneous Equation Model Estimation

Using province panel data of China covering the period of 2001-2006,this paper employs a simple simultaneous model to examine the aggregate FDI and the different sources of FDI and their technology spillover effects on domestic enterprises.The results indicate that the investment from Taiwan,HongKong and Macao has a positive technology spillover effect.However,the spillover effect from other foreign investors is negative.The technology spillover of aggregate FDI is not clear,and Furthermore,through dividing China into three regions such as Eastern Region,Middle Region and Western Region,we find that investment from different sources always has different effects.But generally,the multi-competition and multi-interaction between local firms and foreign affiliates have the positive effect on their labor productivity respectively,and this paper confirms that the spillovers from competition is affirmative,in addition to the spillovers from contagion and demonstration effect.