Based on the original Feder model, we present a generalized model including the time-lag effect of spillovers and competition mechanism of FDI. Using panel data for 31 provinces in China over the period from 1999 to 2010, we find the competition mechanism have been established between domestic-funded and foreign-invested corporations gradually, which shows the fruit of ``exchanging technology with competition". Furthermore, the time-lag of spillover effects does exist and can be derived by the ''U" curve relations.
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