Quantifying foreign direct investment productivity spillovers in China: A computable general equilibrium model

Ziliang Deng*, Rod Falvey, Adam Blake

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review


For the purposes of this study, we will construct a static monopolistically-competitive computable general equilibrium model to quantify the endogenous productivity spillovers from foreign and domestic firms, using the Chinese economy as a case study. Our simulation results indicate: (i) that the net spillover effects are positive in terms of national total output, GDP and welfare; (ii) that both state-owned and privately-owned firms benefit, but that private firms benefit more; (iii) that industries with large volumes of foreign direct investment (FDI) do not necessarily observe the largest spillover effects; and (iv) that the spillover effects become more prominent when the initial market structure is more concentrated.

Original languageEnglish
Pages (from-to)369-389
Number of pages21
JournalAsian Economic Journal
Issue number4
Publication statusPublished - Dec 2013


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