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FDI technology spillovers, geography, and spatial diffusion

Lin, Mi and Kwan, Yum K. (2016) FDI technology spillovers, geography, and spatial diffusion. International Review of Economics and Finance, 43 . pp. 257-274. ISSN 1059-0560

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Item Type:Article
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Abstract

This paper investigates the geographic extent of FDI technology spillovers and associated spatial diffusion. By adopting a spatiotemporal autoregressive panel model as the platform of our study, the complex impact resulting from FDI penetration is separated into spatial direct and indirect effect while accounting for feedback loops among regions. A set of spatially partitioned summary measures is produced to identify and to quantify FDI spillovers from different channels with distinct geographic scopes. Empirical results based on data from China document that the direct impacts of FDI presence to a specific location itself are likely to be negative. Domestic firms mainly benefit from FDI presence in their neighboring regions through knowledge spillovers that have wider geographic scope. Negative market stealing effect nevertheless has no spatial boundary. Policy implications of these findings are discussed.

Keywords:FDI spillovers, Spatial diffusion, Spatial dynamic panel, Chinese economy, NotOAChecked
Subjects:L Social studies > L140 Econometrics
L Social studies > L160 International Economics
L Social studies > L100 Economics
Divisions:Lincoln International Business School
ID Code:19483
Deposited On:05 Nov 2015 15:41

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