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Prior literature on foreign direct investment (FDI) spillovers has mainly focused on how the presence of FDI affects the productivity of domestic firms. In this study, we advance the literature by examining the effect of the diversity of FDI country origins on the productivity of domestic firms. We propose that the diversity of FDI country origins can facilitate FDI spillovers by increasing the variety of technologies and management practices brought by foreign firms, to which domestic firms are exposed and that they can potentially utilize. Further, the extent to which domestic firms can utilize these technologies and practices depends upon their absorptive capacity. Using panel data on Chinese manufacturing firms during the period 1998-2003, our results support these propositions. We find that the diversity of FDI country origins in an industry has a positive relationship with the productivity of domestic firms in the industry. This positive relationship is stronger when domestic firms are larger, and when the technology gap between FDI and the domestic firms is intermediate.

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Plant immunity often penalizes growth and yield. The transcription factor Ideal Plant Architecture 1 (IPA1) reduces unproductive tillers and increases grains per panicle, which results in improved rice yield. Here we report that higher IPA1 levels enhance immunity. Mechanistically, phosphorylation of IPA1 at amino acid Ser within its DNA binding domain occurs in response to infection by the fungus and alters the DNA binding specificity of IPA1. Phosphorylated IPA1 binds to the promoter of the pathogen defense gene and activates its expression, leading to enhanced disease resistance. IPA1 returns to a nonphosphorylated state within 48 hours after infection, resuming support of the growth needed for high yield. Thus, IPA1 promotes both yield and disease resistance by sustaining a balance between growth and immunity.