Technological spillovers from foreign direct investment (FDI) have been regarded as a major source of technical progress and productivity growth. This paper explores the role of international and intranational technological spillovers from FDI in technical change, efficiency improvement, and total factor productivity growth in Chinese manufacturing firms using a recent Chinese manufacturing firm-level panel data set over the 2001–05 period. International industry-specific research and development (R&D) stock is linked to the Chinese firm-level data, international R&D spillovers from FDI and intranational technological spillovers of R&D activities by foreign invested firms in China are examined as well. Policy implications are discussed.
The authors would like to thank Wing Thye Woo, V. N. Balasubramanyam, Shigeyuki Abe, Chul Chung, Bhanupong Nidhiprabha, and conference participants at the Asian Economic Panel Annual Meeting (Seoul, April 2008), North America Productivity Workshop (New York, June 2008) and the Chinese Economic Association (UK) Annual Conference (Cambridge, March 2008) for helpful comments.