Reverse Technology Spillover Effects of Outward FDI to P.R. China: A Threshold Regression Analysis

Abstract

This paper uses P.R. China’s provincial data from 2003 to 2012 to empirically measure the impact of marketization on the reverse technology spillover effects of outward foreign direct investment (OFDI) using a panel threshold regression model. Results show a positive reverse technology spillover effect of OFDI when the degree of marketization exceeds certain threshold levels. P.R. China can increase total factor productivity by accelerating the implementation of reforms in market policy toward outward FDI that take into account the differential regional marketization levels.