Title

Spillover effects of FDI on innovation in China : evidence from the provincial data

Document Type

Journal article

Source Publication

China Economic Review

Publication Date

3-1-2004

Volume

15

Issue

1

First Page

25

Last Page

44

Keywords

FDI, Patent, Spatial effect, Spillover

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.

DOI

10.1016/S1043-951X(03)00027-0

Print ISSN

1043951X

E-ISSN

18737781

Publisher Statement

Copyright © 2003 Elsevier Inc

Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Recommended Citation

Cheung, K.-y., & Lin, P. (2004). Spillover effects of FDI on innovation in China: Evidence from the provincial data. China Economic Review, 15(1), 25-44. doi: 10.1016/S1043-951X(03)00027-0