The impact of foreign direct investment on labour productivity in the Chinese electronics industry

Xiaming Liu*, David Parker, Kirit G. Vaidya, Yingqi Wei

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

Foreign direct investment (FDI) may have a positive impact on labour productivity in recipient industries through direct introduction of capital, technology and management skills and indirectly through spillover effects on domestic firms. This study uses a model intended to examine the overall effects of inward FDI in the Chinese electronics industry. Official data are used for 41 sub-sectors of the industry in 1996 and 1997 having differing levels of FDI. Labour productivity is modelled as dependent on the degree of foreign presence in the industry and other variables, namely capital intensity, human capital and firm size for scale factors. The econometric results suggest that foreign presence in the industry is associated with higher labour productivity. © 2001 Elsevier Science Ltd.

Original languageEnglish
Pages (from-to)421-439
Number of pages19
JournalInternational Business Review
Volume10
Issue number4
DOIs
Publication statusPublished - Aug 2001

Keywords

  • China
  • electronics industry
  • F21
  • FDI
  • L63
  • labour productivity

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