Science Research Management ›› 2013, Vol. 34 ›› Issue (9): 114-122.

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FDI, industrial agglomeration and total factor productivity growth

Zhang Gongwei1,2, Chen Xiang2, Li Zan2   

  1. 1. Hebei United University, Tangshan 063009, China;
    2. Tangshan Institute of Scientific Development, Interdisciplinary Science Center ofChinese Academy of Sciences, Tangshan 063009, China
  • Received:2011-11-07 Revised:2012-09-20 Online:2013-09-27 Published:2013-09-10

Abstract: The coupling of China's FDI with the industrial agglomeration in space has decided that it will be biased to study it impacts on the TFP growth of the manufacturing industry. This paper first calculates the Total Factor Productivity (TFP) of 28 professions of the manufacturing industries in China from 2000 to 2009 using the DEA-Malmquist index method, and then it studies how FDI and industrial agglomeration affect the TFP in the manufacturing industry and its breakdown indicators in a unified framework. The paper finds that manufacturing industry has an average annual growth rate of 9.6%, in which over 80% is contributable to the technological progress whereas there is little difference of technological progress and much difference of technological efficiency among different industries, and the latter becomes the main reason for the difference of the TFP growth. The regression results indicate that FDI has generally the technological spillover effect and the industrial agglomeration plays a positive external effect. The interactive effect of them had significant differences in affecting the TFP growth of four types of industries which are classified by the factor intensity.

Key words: FDI, industrial agglomeration, total factor productivity (TFP), DEA-Malmpuist index method

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