The role of geographical proximity in FDI productivity spillovers in China

Sun, Sizhong, Song, Ligang, and Drysdale, Peter (2011) The role of geographical proximity in FDI productivity spillovers in China. In: Xu, Lilai, (ed.) China’s Economy in the Post-WTO Environment: stock markets, FDI and challenges of sustainability. Edwar Elgar Publishing, Cheltenham, UK, pp. 142-156.

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This paper examines the impact of geographical proximity to FDI-invested firms on domestic firms’ labour productivity in China, using a comprehensive firm level data set for China’s manufacturing sector from 2005 to 2007. We find a significantly negative effect from the geographical proximity on the productivity of domestic firms, This suggests that the negative effect of fiercer competition owing to geographical proximity to FDI firms (particularly in the short run) may outweigh the positive effect of geographical proximity on domestic firms resulting from the backward and forward linkages and labour mobility.

Item ID: 20172
Item Type: Book Chapter (Research - B1)
ISBN: 978-1-84980-934-4
Date Deposited: 15 Mar 2012 01:11
FoR Codes: 14 ECONOMICS > 1402 Applied Economics > 140202 Economic Development and Growth @ 30%
14 ECONOMICS > 1402 Applied Economics > 140209 Industry Economics and Industrial Organisation @ 35%
14 ECONOMICS > 1402 Applied Economics > 140210 International Economics and International Finance @ 35%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9102 Microeconomics > 910210 Production @ 100%
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