Spillover Effects of FDI on Innovation in China: Evidence from the Provincial Data

Posted: 25 Sep 2003

See all articles by Kui-yin Cheung

Kui-yin Cheung

Lingnan University - Department of Economics

Ping Lin

Lingnan University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Abstract

Foreign direct investment (FDI) can benefit innovation activity in the host country via spillover channels such as reverse engineering, skilled labor turnovers, demonstration effects, and supplier-customer relationships. Using provincial data from 1995 to 2000, we find positive effects of FDI on the number of domestic patent applications in China. This finding is robust under both pooled time-series and cross-section data estimation and panel data analysis and for different types of patent applications (invention, utility model, and external design). The spillover effect is the strongest for minor innovation such as external design patent, highlighting a "demonstration effect" of FDI.

Keywords: FDI, spillover, patent, spatial effect

JEL Classification: O31, O53

Suggested Citation

Cheung, Kui-yin and Lin, Ping, Spillover Effects of FDI on Innovation in China: Evidence from the Provincial Data. Available at SSRN: https://ssrn.com/abstract=440521

Kui-yin Cheung

Lingnan University - Department of Economics ( email )

135 Xingang Xi Road
Tuen Mun
Guangzhou, Guangzhou 510275
China

Ping Lin (Contact Author)

Lingnan University - Department of Economics ( email )

135 Xingang Xi Road
Tuen Mun
Guangzhou, Guangzhou 510275
China
(852)2616 7203 (Phone)
(852)2891 7940 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
1,443
PlumX Metrics