2008•Kexuexue yanjiuOpen access

Spillovers effects of FDI in China manufacture industries

Fang Jianwen

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Abstract

Foreign direct investment(FDI) can benefit innovation activity in the host country via various spillover channels.Using China manufacture industry data from 1999 to 2006,this study make an attempt to examine spillover effects both within and between sectors.We use three indexes to define FDI share in a sectors,which are values added,fix assets investment and employee,to measure different spillover ways.The results show that,on average,FDI improves domestic companies' productivity through the horizontal and vertical channels.Additional,the mechanisms of spillovers may not be linear.

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Foreign direct investment(FDI) can benefit innovation activity in the host country via various spillover channels.Using China manufacture industry data from 1999 to 2006,this study make an attempt to examine spillover effects both within and between sectors.We use three indexes to define FDI share in a sectors,which are values added,fix assets investment and employee,to measure different spillover ways.The results show that,on average,FDI improves domestic companies' productivity through the horizontal and vertical channels.Additional,the mechanisms of spillovers may not be linear.

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Available abstract

Foreign direct investment(FDI) can benefit innovation activity in the host country via various spillover channels.Using China manufacture industry data from 1999 to 2006,this study make an attempt to examine spillover effects both within and between sectors.We use three indexes to define FDI share in a sectors,which are values added,fix assets investment and employee,to measure different spillover ways.The results show that,on average,FDI improves domestic companies' productivity through the horizontal and vertical channels.Additional,the mechanisms of spillovers may not be linear.

Key concepts: Spillover effect, Foreign direct investment, China, Productivity, Business, Investment (military), International economics, Industrial organization

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