FDI Spillover Effects in China’s Manufacturing Sector: New Evidence from Forward and Backward Linkages

Chengchun Li, Sailesh Tanna

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

9 Citations (Scopus)


This paper assesses the spillover effects of inward foreign direct investment (FDI) on firm-level productivity growth in China’s manufacturing sector over the period 2006-2009. We use a detailed industrial classification of data to characterise both intra-industry and inter-industry linkages, in contrast to most previous studies for developing countries. Our findings suggest that there is a negative short-term effect and a positive long-run effect from FDI at both linkage levels. Among the inter-industry linkages, in line with previous studies, the backward linkage is an important channel for domestic firms to obtain technology spillovers in the long-run. However, our results also indicate that forward linkages are equally important, as we find a strongly positive impact of this linkage on productivity growth of domestic manufacturing firms in China.
Original languageEnglish
Title of host publicationAdvances in Panel Data Analysis in Applied Economic Research
Subtitle of host publication2017 International Conference on Applied Economics (ICOAE)
EditorsNicholas Tsounis, Aspasia Vlachvei
Place of PublicationSwitzerland
Number of pages20
ISBN (Electronic)978-3-319-70055-7
ISBN (Print)978-3-319-70054-0
Publication statusPublished - 18 Apr 2018
EventInternational Conference on Applied Economics - Coventry University Technology Park, Coventry, United Kingdom
Duration: 6 Jul 20178 Jul 2017

Publication series

NameSpringer Series in Business and Economics


ConferenceInternational Conference on Applied Economics
Abbreviated titleICOAE
Country/TerritoryUnited Kingdom
Internet address


  • Foreign direct investment
  • Technology spillovers
  • Productivity growth


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