Outward Direct Investment and Productivity Changes within China: An Empirical Test

摘要

In this paper, We adopt VAR model to estimate the technology sourcing effects of China's ODI on its domestic productivity growth and the contribution of two sources of productivity growth - technological progress and efficiency change, respectively. We examine these with data from China's direct investment in 8 developed countries during 1991 and 2007. We find the ODI to be strongly beneficial to total factor productivity and efficiency change appears as the greater source of productivity growth in China.