62 / 2015-07-08 09:48:54

An Empirical Analysis on the Spillover Effects of Foreign Invested Enterprises in China

7347,7346,7345

Abstract:

Whether the foreign enterprises in China have spillover effects and whether the foreign direct investment should be promoted and subsidized are hot arguments for scholars all the time. The most existing studies do not reflect the Chinese development of the last ten years, and those empirical results are quite different because the researching objects, theories, and methods are various. This empirical study uses the panel data of 31 Chinese regions (22 provinces, 5 autonomous regions, and 4 municipalities) from the year 2000 to 2012, and finds that the foreign enterprises in China has no spillover effects on the domestic economies in 2/3 of the 31 regions. In addition, even if the rest of regions have statistically significant spillover effects, the effects are not economically significant, which means the positive spillover effects are very small and limited. The spillover effects of foreign direct investment are much less than the expectation in China.