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In recent years, the rise of Chinese investments follows the provisions of the “Going Out” strategy. Whether this local production foreign direct investment has a positive role in reverse spillovers to the parent company? Does the theme of the “Industry hollow” which has been caused great attention really existence? In this paper, we analyzed the reverse spillover of local production outward foreign direct investment (OFDI) using firm-level data from Chinese industrial enterprises in the period of 2000 to 2011. We will separately analyze the problem from productivity, exports and the scale of production. Combining with the method of propensity score matching and difference in difference estimator, we find that the productivity, the scale of production, and the export have all significantly improved no matter which data sample we use. In general, the local production of OFDI has a positive effect on the parent company; the Chinese government should encourage the enterprises to go out.

The Parent Firms’ Reverse Spillovers of China’s Production-Oriented OFDI Enterprises: Evidence from Chinese Manufacturing Enterprises