Journal of Finance and Economics

Journal of Finance and Economics

ISSN: 2291-4951 (Print)    ISSN: 2291-496X (Online)

Volume 2 (2014), No. 3, Pages 31-40

DOI: 10.12735/jfe.v2i3p31

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A Model for the Roles of FDI in Shaping Productivity Growth: With Empirical Evidence from China

Yanqing Jiang1 

1School of Economics and Finance, Shanghai International Studies University, Shanghai, P. R. China


To Cite this Article     Article Views: 1033     Downloads: 554  Since January, 2015


This paper presents an analytic framework with empirical evidence aiming to improve our understanding of the roles of foreign direct investment (FDI) in shaping productivity growth. Specifically, the study empirically examines the effects of FDI on China’s regional productivity growth. Our analyses based on two versions of our model, one excluding and one including human capital, show that FDI has both a general growth effect and a convergence effect on productivity in the Chinese provinces over the period 1996–2012. Our findings imply, at least in the case of the Chinese provinces, that apart from its direct, static level effect on output as an accumulable factor of production, FDI also exerts indirect, dynamic impacts on output through its growth and convergence effects on productivity.

JEL Classifications: F41, O47, O53

Keywords: foreign direct investment, productivity; growth, convergence

To Cite this Article: Jiang, Y. Q. (2014). A model for the roles of FDI in shaping productivity growth: With empirical evidence from China. Journal of Finance and Economics, 2(3), 31-40.

Copyright © Yanqing Jiang

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This article is published under license to Science and Education Centre of North America. This is an Open Access article distributed under the terms of the Creative Commons Attribution 4.0 International License.

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A Model for the Roles of FDI in Shaping Productivity Growth: With Empirical Evidence from China