FDI Technology Spillovers, Geography, and Spatial Diffusion

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalNot applicablepeer-review

12 Scopus Citations
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Detail(s)

Original languageEnglish
Pages (from-to)257-274
Journal / PublicationInternational Review of Economics & Finance
Volume43
Early online date15 Feb 2016
Publication statusPublished - May 2016

Abstract

This paper investigates the geographic extent of FDI technology spillovers and associated spatial diffusion. By adopting a spatiotemporal autoregressive panel model as the platform of our study, the complex impact resulting from FDI penetration is separated into spatial direct and indirect effects while accounting for feedback loops among regions. A set of spatially partitioned summary measures is produced to identify and to quantify FDI spillovers from different channels with distinct geographic scopes. Empirical results based on data from China document that the direct impacts of FDI presence to a specific location itself are likely to be negative. Domestic firms mainly benefit from FDI presence in their neighboring regions through knowledge spillovers that have wider geographic scope. Negative market stealing effect nevertheless has no spatial boundary. Policy implications of these findings are discussed.

Research Area(s)

  • FDI spillovers, spatial diffusion, geography, spatial dynamic panel, Chinese economy.