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Spillover Effects Of Fdi On Innovation In China : An Analysis Of Provincial Data, Kui Yin Cheung, Ping Lin
Spillover Effects Of Fdi On Innovation In China : An Analysis Of Provincial Data, Kui Yin Cheung, Ping Lin
CAPS Working Paper Series
We use the provincial data from 1995 to 2000 to test the impact of inward FDI on innovation activity in China. We found a positive effect of FDI on the number of patent applications filed by the domestic firms. This positive relationship persists when we divide the patents by types (invention, utility model and external design) and when we group the provinces into regions (the coastal, central, and the western regions). This positive spillover effect is much stronger for minor innovations such as external design and utility model, highlighting a "demonstration effect" of FDI. However, FDI into the coastal region …