Heterogeneity of FDI and technological spatial interdependence in the economic growth

Abstract

Abstract: There are lots of literatures on the technological spillover and the heterogeneity of FDI in economic growth. However, majority literatures ignore spatial effects in the economy. Therefore a growth model of the heterogeneity of FDI together with the technological interdependence between economies-spatial augmented solow model is developed, and a fixed-effect spatial panel estimation is conducted by using the sample of Chinese provinces over the period 1987-2007. The results indicate that (1) the technological interdependence between provinces exists and remains significant; (2) FDI's spillover effect is significantly different from domestic physical capital; (3) the economic growth between provinces is interdependent; (4) the spatial externality of FDI is insignificant in the whole country of China, but is significant in China's eastern region. The conclusion is instructive in the distribution of the domestic investment between provinces, the formulation of FDI policy, and the joint development of neighboring provinces' economies.

Key words: heterogeneity of FDI, spatial externality, technological spatial interdependence, fixed-effect spatial panel estimation

CLC Number:

Gao Yuandong, Chen Xun. Heterogeneity of FDI and technological spatial interdependence in the economic growth[J]. Science Research Management, 2011, 32(6): 67-74.

References

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