Does foreign direct investment facilitate technological progress? Evidence from Chinese industries

Xiaohui Liu*, Chenggang Wang

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This paper studies the impact of foreign direct investment (FDI) on total factor productivity (TFP) for a cross sectional sample of Chinese industrial sectors. The possible determinants of TFP are sought with special focus on FDI. An endogeneity test is performed in order to avoid inconsistent results. Evidence indicates that foreign presence, the level of R&D and the firm size are the most important factors enhancing TFP in Chinese industries. The findings from this study support the argument that attracting FDI is an effective way of introducing advanced technology to host countries.

Original languageEnglish
Pages (from-to)945-953
Number of pages9
JournalResearch policy
Volume32
Issue number6
DOIs
Publication statusPublished - 1 Jun 2003

Keywords

  • Chinese industries
  • Foreign direct investment
  • Technological progress
  • Total factor productivity

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