How does the productivity of foreign direct investment spill over to local firms in Chinese manufacturing?

Adam Blake, Ziliang Deng, Rod Falvey

Research output: Chapter in Book/Report/Conference proceedingChapterResearchpeer-review

Abstract

Productivity spillovers are arguably one of the most important benefits of FDI. Productivity spillovers are economic externalities that the presence of FDI brings to the host country’s domestic firms. These spillovers can take place through four broad channels, namely, inter-firm mobility of workers and managers, industry input-output linkages, exports by multinational affiliates, and horizontal effects. There has been a rich emerging literature, both theoretical and empirical, on these FDI productivity spillover channels since the 1990s. The empirical results show that the effectiveness of the different spillover channels also depends on various properties of the potential local recipients, such as their export propensity, research and development expenditure, geographic proximity to foreign firms, and employee training. The sources of FDI are also found to have an impact on spillover effects. This literature indicates that FDI productivity spillovers are complex phenomena, whose investigation requires detailed firm-level data.
Original languageEnglish
Title of host publicationChina's Three Decades of Economic Reforms
PublisherRoutledge
Pages230-243
Number of pages14
ISBN (Print)0203873882, 9780203873885
DOIs
Publication statusPublished - 27 Aug 2009
Externally publishedYes

Fingerprint

Foreign direct investment
Productivity spillovers
Spillover
Productivity
Manufacturing
Multinationals
Managers
Spillover effects
Expenditure
Empirical results
Linkage
Domestic firms
Proximity
Foreign firms
Workers
Employee training
Externalities
Propensity
Industry
Firm-level data

Cite this

Blake, A., Deng, Z., & Falvey, R. (2009). How does the productivity of foreign direct investment spill over to local firms in Chinese manufacturing? In China's Three Decades of Economic Reforms (pp. 230-243). Routledge. https://doi.org/10.4324/9780203873885
Blake, Adam ; Deng, Ziliang ; Falvey, Rod. / How does the productivity of foreign direct investment spill over to local firms in Chinese manufacturing?. China's Three Decades of Economic Reforms. Routledge, 2009. pp. 230-243
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Blake, A, Deng, Z & Falvey, R 2009, How does the productivity of foreign direct investment spill over to local firms in Chinese manufacturing? in China's Three Decades of Economic Reforms. Routledge, pp. 230-243. https://doi.org/10.4324/9780203873885

How does the productivity of foreign direct investment spill over to local firms in Chinese manufacturing? / Blake, Adam; Deng, Ziliang; Falvey, Rod.

China's Three Decades of Economic Reforms. Routledge, 2009. p. 230-243.

Research output: Chapter in Book/Report/Conference proceedingChapterResearchpeer-review

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Blake A, Deng Z, Falvey R. How does the productivity of foreign direct investment spill over to local firms in Chinese manufacturing? In China's Three Decades of Economic Reforms. Routledge. 2009. p. 230-243 https://doi.org/10.4324/9780203873885