Capability Gap, Growth and FDI Spillover in China

摘要

Following Kokko, with an extended testing model which can separates two FDI inntra-industry spillover mechanisms,spillover by intensity and spillover by competition, this paper verifies capability gap between local firms and foreign ones and thegrowth of domestic firms are two industry features that have significant impact on FDI intra-industry spillover in China.Furthermore, these two industry features influence the two intra-industry spillover mechanisms differently. The empirical resultsindicates that the capability gap between local firms and foreign ones mainly influences FDI spillover by competition, and the growthof domestic firms influences both types ofFDI spillover.