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The spillover effect of FDI and its impact on productivity in high economic output regions: A comparative analysis of the Y angtze R iver D elta and the P earl R iver D elta, C hina
Author(s) -
Wen Yuyuan
Publication year - 2014
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/pirs.12086
Subject(s) - spillover effect , productivity , economics , microeconomics , economic growth
Using a dynamic panel data spatial Durbin model, this paper aims to examine FDI spillover and impacts on urban productivity in the Y angtze R iver D elta ( YRD ) and the P earl R iver D elta ( PRD ). We find that FDI has positive impacts on local city's productivity but its spatial spillovers behave differently in the YRD and PRD . Spatial interactions cannot be neglected in urban growth; yet YRD and PRD demonstrates significant but opposite spatial growth effects. FDI accelerates the economic growth convergence in the YRD while slows down convergence in the PRD . Positive spatial spillover of productivity occurs in the YRD while negative spatial spillover occurs in the PRD . The results point to important policy implications for the two regions to attract FDI and promote urban development.