Business, Management and Accounting
8 years ago

Foreign investment boosts China's industrial productivity, benefiting diverse industries.

Review of Development Economics
FDI and Industrial Productivity in China: Evidence from Panel Data in 2001–06
Zhongxiu Zhao, Kevin Honglin Zhang

Paper Summary

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Foreign direct investment (FDI) has a positive impact on China's industrial productivity. FDI directly and indirectly boosts productivity levels and growth in industries. Labor-intensive industries benefit more from FDI's direct effects, while capital-intensive industries gain more from FDI's spillover effects. The interaction between FDI and China's human capital enhances the contribution of FDI to productivity.