Regional Innovation and Spillover Effects of Foreign Direct Investment in China: A Threshold Approach

Lingyun Huang (1) , Xiaming Liu (2) , Lei Xu (1)

1 College of Economics
2 Birkbeck College [University of London]

Using a panel data set on 29 Chinese provinces for the period 1985-2005, this paper establishes a threshold model to analyse the relationship between spillover effects of foreign direct investment (FDI) and regional innovation in China. There is clear evidence of double-threshold effects of regional innovation on productivity spillovers from FDI. Specifically, only when the level of regional innovation reaches the minimum innovation threshold will FDI in the region begin to produce positive productivity spillovers. Furthermore, positive productivity spillovers from FDI will be substantial only when the level of regional innovation attains a higher threshold. The double threshold divides Chinese provinces into three super-regions in terms of innovation, with most provinces positioned within the middle-level innovation super-region. Policy implications are discussed.

Mots clés: Social Sciences & Humanities

Lingyun Huang, Xiaming Liu, Lei Xu. Regional Innovation and Spillover Effects of Foreign Direct Investment in China: A Threshold Approach. Regional Studies, 2010, pp.1. ⟨10.1080/00343404.2010.520694⟩. ⟨hal-00648529⟩