|identifying fdi spillovers||1.04||0.7||3214||87|
How to explain negative FDI spillovers The previous section establishes that FDI causes a negative spillover effect on the productivity of domestic firms in the same industry. In this section, we explore the relevance of two hypotheses that are widely used to explain the negative FDI spillover effect. 4.1. Agglomeration versus competitionDoes horizontal FDI spillover affect competition and agglomeration?
Consistently, we find that the negative spillover effect of horizontal FDI is stronger in scenarios where the competition effect is more pronounced, but that it is either smaller in magnitude, albeit negative, or even positive in cases where the agglomeration effect is more prominent.Does FDI spillover from the WTO affect processing trading in China?
If the extent of processing trading changed discontinuously upon China's WTO accession and across industries, our estimates of the spillover effect of FDI could simply reflect the changes in this trading regime.What determines changes in FDI regulations?
Determinants of changes in FDI regulations include new product intensity, export intensity, number of firms, and average age of firms at the four-digit industry level in 1998. Tariff reductions include output tariff, input tariff, and export tariff at the four-digit industry level in 2001.