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GTAP Resources: Resource Display

GTAP Resource #2681

"Productivity Spillover of Foreign Direct Investment: A Computable General Equilibrium Model of China"
by Deng, Ziliang, Rod Falvey and Adam Blake


Abstract
A computable general equilibrium (CGE) model is constructed to capture the endogenous productivity spillover from foreign-invested firms to domestic firms in China. This paper summarizes the main results we have found so far.

There are three contributions we have made to the knowledge. First and foremost, the endogenous productivity increase in manufacturing sectors caused by FDI spillover has been successfully introduced into a CGE model. The productivity spillover effects in both perfectly competitive and imperfectly competitive markets are also compared. This technique can be readily applied to a global dynamic CGE model embodying trade-FDI-productivity spillover linkages. Second, we have estimated and compared the importance of four spillover channels in econometric analyses and the CGE model. Third, we have made a tentative assessment of Chinese FDI policies characterised by swapping market access for technology with the CGE prototype model.

There are various directions worth future research, e.g. to estimate productivity spillover parameters by industries with firm-level data, to extend the research to include spillovers in services sectors, and to construct a global dynamic model capturing capital accumulation and trade-FDI-productivity interactions.


Resource Details (Export Citation) GTAP Keywords
Category: 2008 Conference Paper
Status: Published
By/In: Presented at the 11th Annual Conference on Global Economic Analysis, Helsinki, Finland
Date: 2008
Version: 1
Created: Deng, Z. (4/14/2008)
Updated: Deng, Z. (4/14/2008)
Visits: 1,769
- Economic development
- Foreign direct investment
- Technological change
- Calibration and parameter estimation
- Asia (East)


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