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Trade, Foreign Direct Investment and Spillover Effect: An Empirical Analysis on FDI and Import from G7 to China

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Abstract

The recent theories of economic growth indicated a country’s productivity depends not only on the domestic R&D but also on Foreign R&D capital. Especially, the developing countries can benefit from R&D that is performed in the industrial countries by trading with the industrial countries or by receiving FDI from the industrial countries. The purpose of this paper is to test the spillover effect through import and FDI from the developed countries to China. The empirical results, support the beneficial spillover effect both through import and FDI.

Key words

Trade Foreign Direct Investment G7 China Spillover Effect 

JEL Classification

F2 O5 

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Copyright information

© Japan Economic Policy Association (JEPA) 2006

Authors and Affiliations

  1. 1.Daito-CityJapan

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