Foreign Direct Investment and Total Factor Productivity in China: A Spatial Dynamic Panel Analysis

Oxford Bulletin of Economics and Statistics

Volumn 73, Issue 6, 2011, Pages 771-791

  Hong, Eunsuk ^a   Sun, Laixiang ^b,c,d,e  

^a QUEEN'S UNIVERSITY BELFAST   (United Kingdom)

^b UNIVERSITY OF LONDON   (United Kingdom)

^c INSTITUTE OF GEOGRAPHIC SCIENCES AND NATURAL RESOURCES RESEARCH   (China)

^d INTERNATIONAL INSTITUTE FOR APPLIED SYSTEMS ANALYSIS   (Austria)

^e Peking University   (China)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 82055194484     PISSN: 03059049     EISSN: 14680084     Source Type: Journal    
DOI: 10.1111/j.1468-0084.2011.00672.x     Document Type: Article

References (49)

1. Abreu, M., de Groot, H. L. F. and Florx, R. J. G. M. (2005a). 'Space and growth: a survey of empirical evidence and methods', Région et Développement, Vol. 21, pp. 13-44.
2. Abreu, M., de Groot, H. L. F. and Florx, R. J. G. M. (2005b). 'A meta-analysis of β-convergence: the legendary 2%', Journal of Economic Surveys, Vol. 19, pp. 389-420.
3. Adams, J. D. and Jaffe, A. B. (1996). 'Bounding the effects of R&D: an investigation using matched establishment-firm data', RAND Journal of Economics, Vol. 27, pp. 700-721.
4. Aghion, P. and Howitt, P. (2007). 'Capital, innovation, and growth accounting', Oxford Review of Economic Policy, Vol. 23, pp. 79-93.
5. Aitken, B. and Harrison, A. E. (1999). 'Do domestic firms benefit from direct foreign investment? Evidence from Venezuela', American Economic Review, Vol. 89, pp. 605-617.
6. Arellano, M. and Bover, O. (1995). 'Another look at instrumental variable estimation of error-component models', Journal of Econometrics, Vol. 68, pp. 29-52.
7. Badinger, H., Muller, W. G. and Tondl, G. (2004). 'Regional convergence in the European Union, 1985-1999: a spatial dynamic panel analysis', Regional Studies, Vol. 38, pp. 241-253.
8. Balasubramanyam, V. N., Salisu, M. and Sapsford, D. (1996). 'Foreign direct investment and growth in EP and IS countries', Economic Journal, Vol. 106, pp. 92-105.
9. Barro, R. J. and Sala-i-Martin, X. (1992). 'Convergence', Journal of Political Economy, Vol. 100, pp. 223-251.
10. Barro, R. J. and Sala-i-Martin, X. (2004). Economic Growth, 2nd edn. The MIT Press, Cambridge, MA.
11. Blundell, R. and Bond, S. R. (1998). 'Initial conditions and moment restrictions in dynamic panel data models', Journal of Econometrics, Vol. 87, pp. 115-143.
12. Bond, S. R., Hoeffler, A. and Temple, J. (2001). GMM Estimation of Empirical Growth Models, CEPR Discussion Paper No. 3048, Centre for Economic Policy Research.
13. Borensztein, E., de Gregorio, J. and Lee, J.-W. (1998). 'How does foreign direct investment affect economic growth?' Journal of International Economics, Vol. 45, pp. 115-135.
14. Bottazzi, L. and Peri, G. (2003). 'Innovation and spillovers in regions: evidence from European patent data', European Economic Review, Vol. 47, pp. 687-710.
15. Brambilla, I., Hale, G. and Long, C. (2009). 'Foreign direct investment and the incentives to innovate and imitate', Scandinavian Journal of Economics, Vol. 111, pp. 835-861.
16. Caselli, F., Esquivel, G. and Lefort, F. (1996). 'Reopening the convergence debate: a new look at cross-country growth empirics', Journal of Economic Growth, Vol. 1, pp. 363-389.
17. Ciccone, A. and Hall, R. E. (1996). 'Productivity and the density of economic activity', American Economic Review, Vol. 86, pp. 54-70.
18. Denison, E. F. (1967). Why Growth Rates Differ: Postwar Experiences in Nine Western Countries, Brookings Institution, Washington, DC.
19. Ding, S. and Knight, J. (2008). Why has China Grown so Fast? The Role of Structural Change, Working Paper No.415, Department of Economics, University of Oxford, Forthcoming in Knight J. and Ding S., China's Remarkable Economic Growth, Oxford University Press.
20. Elhorst, J. P. (2003). 'Specification and estimation of spatial panel data models', International Regional Science Review, Vol. 26, pp. 244-268.
21. Elhorst, J. P. (2005). 'Unconditional maximum likelihood estimation of dynamic models for spatial models', Geographical Analysis, Vol. 37, pp. 85-106.
22. Fagerberg, J. (1994). 'Technology and international differences in growth rates', Journal of Economic Literature, Vol. 32, pp. 1147-1175.
23. Feder, G. (1992). 'On exports and economic growth', Journal of Development Economics, Vol. 12, pp. 59-73.
24. Gilboy, G. F. (2004). 'The myth behind China's miracle', Foreign Affairs, Vol. 83, pp. 33-48.
25. Grossman, G. and Helpman, E. (1991). Innovation and Growth in the Global Economy, MIT Press, Cambridge.
26. Hale, G. and Long, C. (2006). 'Are there productivity spillovers from foreign direct investment in China?' Working Paper Series 2006-13, Federal Reserve Bank of San Francisco.
27. Hanousek, J., Kocenda, E. and Maurel, M. (2010). Direct and Indirect Effects of FDI in Emerging European Markets: A Survey and Meta-analysis, William Davidson Institute Working Paper No. 976, University of Michigan.
28. Harris, R. (2009). Spillover and Backward Linkage Effects of FDI: Empirical Evidence for the UK, Spatial Economics Research Centre (SERC) Discussion Paper No. 0016, University of Glasgow.
29. Hsiao, C. (2003). Analysis of Panel Data, 2nd edn. Cambridge University Press, Cambridge.
30. Islam, N. (1995). 'Growth empirics: a panel data approach', Quarterly Journal of Economics, Vol. 110, pp. 1127-1170.
31. Kukenova, M. and Monteiro, J.-A. (2008). Spatial Dynamic Panel Model and System GMM: A Monte Carlo Investigation, MPRA Paper No. 13405. Online at.
32. Kuznets, S. (1961). 'Economic growth and the contribution of agriculture: notes on measurement', International Journal of Agrarian Affairs, Vol. 3, pp. 56-75.
33. Laurenceson, J. and Tang, K. (2007). The FDI-Income Growth Nexus: A Review of the Chinese Experience, East Asia Economic Research Group Discussion Paper No. 9, School of Economics, University of Queensland.
34. Madariaga, N. and Poncet, S. (2007). 'FDI in Chinese cities: spillovers and impact on growth', The World Economy, Vol. 30, pp. 837-862.
35. Mankiw, N. G., Romer, D. and Weil, D. N. (1992). 'Contribution to the empiries of economic growth', The Quarterly Journal of Economics, Vol. 107, pp. 407-437.
36. Markusen, J. and Venables, A. (1999). 'Foreign direct investment as a catalyst for industrial development', European Economic Review, Vol. 43, pp. 335-356.
37. Nickell, S. J. (1981). 'Biases in dynamic models with fixed effects', Econometrica, Vol. 49, pp. 1417-1426.
38. Rodriguez, F. and Rodrik, D. (2001). 'Trade policy and economic growth: a skeptic's guide to the cross-national evidence', in Bernanke B. and Rogodd R. (eds) NBER Macroeconomics Annual 2000, The MIT Press, Cambridge, MA, pp. 261-338.
39. Roodman, D. (2009). 'A note on the theme of too many instruments', Oxford Bulletin of Economics and Statistics, Vol. 71, pp. 135-158.
40. Sawada, N. (2004). Technology Transfer, Spillovers and Growth through FDI in Developing Countries, University of Hawaii, Manoa.
41. State Statistical Bureau (SSB) (20002010). China Statistical Yearbook. China Statistical Publishing House, Beijing.
42. State Statistical Bureau (SSB) (1999). Statistical Data on 50 Years of New China, 1949-1998. China Statistical Publishing House, Beijing.
43. Sun, L., ven Veen, W., Zhang, X., Huang, J. and Qiu, H. (2008). China's Economic Growth Outside the Farm Sector: Plausible Trends towards 2030, EU-FP6-CATSEI Project Deliverable D4, School of Oriental and African Studies (SOAS), University of London.
44. Sun, L., Hong, E. and Li, T. (2010). 'Incorporating technology diffusion, factor mobility and structural change into cross-region growth regression: an application to China', Journal of Regional Science, Vol. 50, pp. 734-755.
45. Temple, J. and Wößmann, L. (2006). 'Dualism and cross-country growth regressions', Journal of Economic Growth, Vol. 11, pp. 187-228.
46. Wei, Y. and Liu, X. (2006). 'Productivity spillovers from R&D, exports and FDI in China's manufacturing sector', Journal of International Business Studies, Vol. 37, pp. 544-557.
47. Wei, Y., Liu, X. and Wang, C. (2008). 'Mutual productivity spillovers between foreign and local firms in China', Cambridge Journal of Economics, Vol. 32, pp. 609-631.
48. Windmeijer, F. (2005). 'A finite sample correction for the variance of linear efficient two-step GMM estimators', Journal of Econometrics, Vol. 126, pp. 25-51.
49. Yu, J. (2007). Essays on Spatial Dynamic Panel Data Model: Theories and Applications, PhD Dissertation, Department of Economics, The Ohio State University.