Are There Productivity Spillovers from Foreign Direct Investment in China?

19 Pages Posted: 4 May 2011

See all articles by Galina Hale

Galina Hale

University of California, Santa Cruz

Cheryl Long

Colgate University - Economics Department

Multiple version iconThere are 2 versions of this paper

Date Written: May 2011

Abstract

We review previous literature on productivity spillovers of foreign direct investment (FDI) in China and conduct our own analysis using a firm‐level data set from a World Bank survey. We find that the evidence of FDI spillovers on the productivity of Chinese domestic firms is mixed, with many positive results largely due to aggregation bias or failure to control for endogeneity of FDI. Attempting over 6000 specifications that take into account forward and backward linkages, we fail to find evidence of systematic positive productivity spillovers from FDI in China.

Suggested Citation

Hale, Galina and Long, Cheryl Xiaoning, Are There Productivity Spillovers from Foreign Direct Investment in China? (May 2011). Pacific Economic Review, Vol. 16, Issue 2, pp. 135-153, 2011, Available at SSRN: https://ssrn.com/abstract=1830939 or http://dx.doi.org/10.1111/j.1468-0106.2011.00539.x

Galina Hale (Contact Author)

University of California, Santa Cruz ( email )

1156 High St
Santa Cruz, CA 95064
United States

Cheryl Xiaoning Long

Colgate University - Economics Department ( email )

13 Oak Drive
Hamilton, NY 13346
United States

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