Foreign Direct Investment,the Spillover Effect and Economic Growth——A Case of Guangdong Province

This paper empirically studies the relationship between FDI and economic performance in China and in Guangdong province in particular. We distinguish between the spillover effect and the growth effect of FDI. The results demonstrate that the spillover effect mainly works through the channels of demonstration and linkage. Moreover, there is an FDI agglomeration effect. We also find that the spillover effect of FDI in a specific industry is less significant than in a specific city. The results show that the conditions of the host city have a strong impact on the spillover effect.