Connecting the Missing Link between Micro and Macro

26 Pages Posted: 29 Nov 2011

See all articles by Natasha Agarwal

Natasha Agarwal

affiliation not provided to SSRN

Chris Milner

University of Nottingham - School of Economics

Date Written: November 29, 2011

Abstract

Using a panel of 20,460 Chinese manufacturing firms over the period 2001-2005, we apply both parametric and non-parametric estimation techniques to examine the underlying relationship between the economic development of the host province and FDI spillovers. We find that provincial economic development does not systematically influence FDI spillovers. Moreover, there exists considerable heterogeneity in the FDI spillovers not only across the 29 provinces, municipalities and autonomous regions but also across the 10 manufacturing sectors within each of the 29 provinces, municipalities and autonomous regions. This suggests that FDI spillovers in China may be affected by a combination of both the characteristics of the sector within a province and the characteristics of the province itself.

Keywords: FDI spillovers, economic development, heterogeneity, China

JEL Classification: F23, O1, O33

Suggested Citation

Agarwal, Natasha and Milner, Chris, Connecting the Missing Link between Micro and Macro (November 29, 2011). Available at SSRN: https://ssrn.com/abstract=1966036 or http://dx.doi.org/10.2139/ssrn.1966036

Natasha Agarwal

affiliation not provided to SSRN ( email )

Chris Milner (Contact Author)

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

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