FDI,the equipment manufacturing industry growth and regional differences——an empirical analysis based on 2001-2007 panel data from China

The equipment manufacturing industry is strategic for the country,but the existing empirical studies haven't explained whether FDI had caused positive spillover effects to this industry.This paper uses panel data from seven sectors within the equipment manufacturing of Chinese 31 provinces,municipalities and autonomous regions from 2001 to 2007,by OLS and fixed-effect model it concludes that FDI has significantly promoted the growth of China's equipment manufacturing industry;the positive spillover effects are achieved directly and indirectly through its interaction with labor.The positive effects of FDI have no significant differences within the seven sectors;while the differences among regions is remarkable,the spillover effects are higher at the eastern region than the central and western regions,and higher at the central region than the west.