TY - JOUR
T1 - Identifying FDI spillovers
AU - Lu, Yi
AU - Tao, Zhigang
AU - Zhu, Lianming
PY - 2017/7/1
Y1 - 2017/7/1
N2 - This paper improves on the strategy used in the literature to identify the spillover effect of horizontal foreign direct investment (FDI) by taking advantage of the plausibly exogenous relaxation of FDI regulations on China's World Trade Organization accession at the end of 2001. In addition, to understand the (aggregate) FDI spillover effect, the paper evaluates two underlying explanations (the agglomeration effect versus the competition effect, the former of which is further moderated by the absorptive capacity of domestic firms) by distinguishing different types of FDI along various dimensions. Finally, the analysis uses an array of performance measures, including total factor productivity, exporting performance, wages, R&D investment, and firm survival, with one single data set to offer a fuller and more nuanced picture of the impact of FDI on domestic firms.
AB - This paper improves on the strategy used in the literature to identify the spillover effect of horizontal foreign direct investment (FDI) by taking advantage of the plausibly exogenous relaxation of FDI regulations on China's World Trade Organization accession at the end of 2001. In addition, to understand the (aggregate) FDI spillover effect, the paper evaluates two underlying explanations (the agglomeration effect versus the competition effect, the former of which is further moderated by the absorptive capacity of domestic firms) by distinguishing different types of FDI along various dimensions. Finally, the analysis uses an array of performance measures, including total factor productivity, exporting performance, wages, R&D investment, and firm survival, with one single data set to offer a fuller and more nuanced picture of the impact of FDI on domestic firms.
KW - Absorptive capacity
KW - Agglomeration effect
KW - China
KW - Competition effect
KW - Difference-in-differences
KW - FDI spillovers
UR - http://www.scopus.com/inward/record.url?scp=85018470584&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85018470584&partnerID=8YFLogxK
U2 - 10.1016/j.jinteco.2017.01.006
DO - 10.1016/j.jinteco.2017.01.006
M3 - Article
AN - SCOPUS:85018470584
SN - 0022-1996
VL - 107
SP - 75
EP - 90
JO - Journal of International Economics
JF - Journal of International Economics
ER -
