Productivity spillovers from R&amp;D, exports and FDI in China's manufacturing sector

Wei, Yingqi; Liu, X.

doi:10.1057/palgrave.jibs.8400209

Cited by 371 publications

(231 citation statements)

References 45 publications

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“…Spillover channels, mediating factors, and FDI heterogeneity coexist and interact in determining the extent of knowledge spillovers. Theoretical and empirical research should therefore try to address them simultaneously (Wei and Liu 2006;Liang, 2008). Does the importance of absorptive capacity for capturing knowledge spillovers through demonstration effects vary with the degree of multinational enterprise ownership?…”

Section: Resultsmentioning

confidence: 99%

Collecting the Pieces of the FDI Knowledge Spillovers Puzzle

Smeets¹

2008

The World Bank Research Observer

237

145

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Recent surveys of the empirical literature have concluded that the evidence is mixed on the magnitude, direction, and even existence of knowledge spillovers from foreign direct investment (FDI). This article reviews the recent theoretical and empirical literature that responds to these inconclusive results and considers three main issues: spillover channels, mediating factors, and FDI heterogeneity. Studies that take into account individual spillover channels find robust evidence of knowledge spillovers from FDI. Studies on the importance of mediating factors and FDI heterogeneity are less conclusive and could benefit from greater convergence in methodologies and greater specificity in the spillover channels of interest. More generally, many studies do not properly distinguish between knowledge spillovers and knowledge transfers, and empirical studies seem to greatly outnumber theoretical studies. JEL codes: F23, O33In the face of difficulties associated with capturing spillover effects and the multitude of factors that can influence the extent of spillovers in each economy, we caution researchers about drawing generalized conclusions about the existence of externalities associated with [foreign direct investment] . . . . (Javorcik and Spatareanu 2005, 47) Over the past decade or so a large body of research has examined knowledge spillovers from foreign direct investment (FDI). At several points along the way scholars have paused to take stock of the evidence (Blomström and Kokko 1998;Saggi 2002;Görg and Greenaway 2004). The verdict has largely been inconclusive. Indeed, the empirical inconclusiveness has become so infamous that virtually every study reviewed here begins with this observation as its main motivation. Explanations for the lack of conclusive results have focused on methodological and measurement issues (Görg and Strobl 2001), but this sort of approach has recently been disputed (Lipsey and Sjöholm 2005 The literature has developed in several directions to account for the ambiguity in earlier work. This study reviews these contributions, both theoretical and empirical. To provide some structure in a rapidly expanding field and to identify which approach or combination of approaches is likely to yield the most promising results, the study is structured around three themes. 1 More insight into the conditions under which knowledge spillovers from FDI are most likely to arise is especially important for developing countries. The highly ambiguous evidence to date on the existence of knowledge spillovers from FDI does not seem to warrant the large sums of money spent by governments to attract FDI. 2 After setting the stage in the following section, the article is then structured around figure 1, a representation of the FDI knowledge spillover process and the pieces of the puzzle that may affect it. 3 The section on opening the black box of FDI knowledge spillovers discusses the research on vertical linkages, worker mobility, and demonstration effects. This is followed by a review of the evidence o...

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Section: Resultsmentioning

confidence: 99%

Collecting the Pieces of the FDI Knowledge Spillovers Puzzle

Smeets¹

2008

The World Bank Research Observer

237

145

View full text Add to dashboard Cite

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“…In an open economic system, technological progress is made via self-innovation and technological knowledge transfer and spillover through international trade and foreign direct investment (FDI) (Wei and Liu, 2006). However, knowledge transfer and spillovers are never unconditional.…”

Section: Introductionmentioning

confidence: 99%

“…Against this background, a number of studies have been published on the role of FDI in business development, economic growth or technological innovation in China (Wu, 1999;Wei and Liu, 2001;Huang, 2003;Wei and Liu, 2006;Liu and Buck, 2007;Chang and Xu, 2008;Guo, 2008;Wei et al 2008;Liu et al 2009). However, it remains unclear whether there is a minimum threshold of absorptive capacity in China for inward FDI to produce positive spillovers.…”

Section: Introductionmentioning

confidence: 99%

Regional Innovation and Spillover Effects of Foreign Direct Investment in China: A Threshold Approach

Huang

Liu

2012

Regional Studies

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Abstract:Using a data set on 29 Chinese provinces for the period , this paper establishes a threshold model to analyse the relationship between spillover effects of foreign direct investment (FDI) and regional innovation in China. There is clear evidence of doublethreshold effects of regional innovation on productivity spillovers from FDI. Specifically, only when the level of regional innovation reaches the minimum innovation threshold will FDI in the region begin to produce positive productivity spillovers. Furthermore, positive productivity spillovers from FDI will be substantial only when the level of regional innovation attains a higher threshold. The double threshold divides Chinese provinces into three super-regions in terms of innovation, with most provinces positioned within the middle-level innovation super-region. Policy implications are discussed.

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“…Empirical studies have so far produced mixed results. Some studies showed evidence of positive technology spillovers from FDI to local firms, while other studies found that FDI negatively affects the productivity of local firms (see, for instance, Caves, 1974;Globerman, 1979;Kokko;Blomstrom and Wolff, 1996;Aitken and Harrison, 1999;Djankov and Hoekman, 2000;Kathuria, 2000;Chung, 2001;Chuang, Mitchell and Yeung, 2003;Javorcik, 2004;Wei and Liu 2006;Tian 2007;Buckley, Clegg and Wang 2007). 2 Interestingly enough, both sides in the debate have looked at the issue almost exclusively from the perspective of local firms that receive the spillovers rather than the perspective of TNCs that generate the spillovers.…”

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confidence: 99%

Managing FDI technology spillovers: A challenge to TNCs in emerging markets

Tian

2010

Journal of World Business

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Prior studies on FDI technology spillovers have offered little guidance to TNCs on how to protect and exploit technology across borders. The present paper argues that TNCs can manage technology spillovers through selection of entry modes, selection of technologies, and selection of investment priorities in the affiliates they establish in foreign markets. A number of hypotheses are derived from theoretical analyses and are tested against firm-level data from China. The findings of the paper have significant implications for TNCs that face fierce competition from local firms in emerging markets.

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Productivity spillovers from R&D, exports and FDI in China's manufacturing sector

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Cited by 371 publications

References 45 publications

Collecting the Pieces of the FDI Knowledge Spillovers Puzzle

Collecting the Pieces of the FDI Knowledge Spillovers Puzzle

Regional Innovation and Spillover Effects of Foreign Direct Investment in China: A Threshold Approach

Managing FDI technology spillovers: A challenge to TNCs in emerging markets

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