Foreign Direct Investment in China : Winners and Losers

by Hale, Galina; Long, Cheryl

• ISBN13: 9789814340403
• ISBN10: 9814340405
• Format: Hardcover
• Copyright: 2011-09-30
• Publisher: Textstream

Summary

This book provides a comprehensive analysis of the effects that foreign direct investment into China has had on the productivity, exporting activity, and innovation of Chinese domestic firms, as well as on the nation's labor markets. The analysis relies on the most complete data available and state-of-the-art statistical analysis. The book also includes a critical overview of existing theoretical and empirical literature on these issues and is meant to provide guidance to researchers in the area of FDI effects in general, as well as those interested in studying the Chinese economy.

Author Biography

Galina Hale is a senior economist at the Federal Reserve Bank of San Francisco. Prior to her career with the Federal Reserve, she taught at Yale University Economics Department. Galina holds a Ph.D. in economics from UC Berkeley. She was born in Moscow, Russia. Born and raised in Inner Mongolia, China, Cheryl Xiaoning Long holds a Ph.D. in economics from Washington University in St. Louis. She is currently an associate professor of economics and the director of Asian Studies at Colgate University.

Table of Contents

Preface	p. vii
List of Figures	p. xi
List of Tables	p. xiii
Introduction and Overview	p. 1
Foreign Direct Investment and FDI Policies in China	p. 1
Literature on the Effects of FDI	p. 4
Chinese Manufacturing Firms in 2000-2006	p. 8
Outline of Book	p. 14
Effects of FDI on Target Firms	p. 21
Effects of FDI on Total Factor Productivity of Target Firms	p. 21
Effects of FDI on Wages and Labor Quality of Target Firms	p. 29
Effects of FDI on Exports of Target Firms	p. 36
Effects of FDI on New Product Introduction by Target Firms	p. 42
Summary	p. 47
FDI Spillovers on Productivity of Domestic Firmsp49
Estimation Specification and Measurement of FDI Presence	p. 51
Empirical Results	p. 52
Horizontal spillovers	p. 53
Backward linkages	p. 61
Forward linkages	p. 62
Conclusion	p. 67
FDI Spillovers on Labor Markets	p. 69
Firm Ownership and Personnel Practices in China	p. 71
Empirical Evidence	p. 73
Robustness Tests and Discussion	p. 78
Discussion of Empirical Findings	p. 79
Conclusion	p. 81
FDI Spillovers on Exports of Domestic Firms	p. 83
Empirical Results	p. 84
Horizontal spillovers	p. 85
Backward linkages	p. 90
Forward linkages	p. 94
Conclusion	p. 98
FDI and the Incentives to Innovate and Imitate	p. 101
FDI Spillover Effects on New Product Introduction	p. 102
Horizontal spillovers	p. 102
Backward linkages	p. 106
Forward linkages	p. 110
Comparing Innovation with Imitation	p. 114
Empirical analysis	p. 115
Estimation results	p. 116
Conclusion	p. 124
Appendix A: Model of FDI Spillovers on Innovation and Imitation	p. 124
Conclusions	p. 133
Technical Information	p. 143
Data Sources	p. 143
Manufacturing census data	p. 143
World Bank 2001 and 2003 Investment Climate Surveys	p. 147
Empirical Approach	p. 151
Measures of FDI presence	p. 151
Productivity measures	p. 154
Estimating the effects of FDI presence	p. 157
Bibliography	p. 161
Index	p. 169
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