Abstract
The existing literature treats advanced technology sourcing as the only cause of reverse productivity spillovers from local to foreign firms and implies that mutual spillovers between foreign and local firms can only happen in the developed world. This paper argues that the diffusion of indigenous technology and local knowledge helps the productivity enhancement of multinationals, so that there can be mutual spillovers even in a developing country. The results from a large-sample firm-level econometric analysis and a comparative case study of seven companies in Chinese manufacturing support this new argument, as mutual spillovers are identified between local Chinese firms and overseas Chinese or OECD-invested firms.
| Original language | English |
|---|---|
| Pages (from-to) | 609-631 |
| Number of pages | 23 |
| Journal | Cambridge Journal of Economics |
| Volume | 32 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - Jul 2008 |
Bibliographical note
Funding Information:Manuscript received 27 May 2005; final version received 27 March 2007. Address for correspondence: Yingqi Wei, School of Management, Bradford University, Bradford BD9 4JL, UK; email: [email protected] * Bradford University, UK & Hunan University, China, Birbeck College, London and Bradford University, respectively. We thank the journal editors and two anonymous referees for their very helpful comments on earlier versions of the paper. Xiaming Liu gratefully acknowledges the financial support for completing the comparative case study reported in this paper from the Leverhulme Trust.
Keywords
- Foreign direct investment
- Indigenous knowledge
- Mutual productivity spillovers
ASJC Scopus subject areas
- Economics and Econometrics
