Credit Constraints and FDI Spillovers in China

Arbeitspapier

This paper examines whether credit constraints affect Chinese firms' absorption of productivity spillovers from foreign firms. Using firm-level data for 2001-2005, we find evidence of positive spillovers originating from FDI from countries other than Hong Kong, Macau and Taiwan for non-state owned Chinese firms operating in the same industry and province. Our main finding is that domestic firms operating in industries characterised by a greater reliance on external finance, our measure of credit constraints, enjoy lower (and even negative) spillovers from the activity of foreign-owned firms. This result is robust to the inclusion of a wide variety of other industry-level characteristics interacting with the activity of foreign firms.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 4313

Classification and Topics

• Classification: Wirtschaft ; Multinational Firms; International Business ; Capital Budgeting; Fixed Investment and Inventory Studies; Capacity ; Economic Development: General ; Technological Change: Choices and Consequences; Diffusion Processes
• Subject: FDI spillovers ; credit constraints ; China

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Agarwal, Natasha ; Milner, Chris ; Riaño, Alejandro
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/77695
• Last update: 10.03.2025, 11:42 AM CET