Accounting for sources of FDI technology spillovers: evidence from China

Using a set of panel data of 11,324 firms in China from 1996 to 1999, the paper finds that positive technology spillovers from FIEs to domestic firms occur through tangible assets rather than intangible assets, through domestically consumed products rather than exported products, through 'traditional' products rather than new products, and through FIEs employing unskilled workers rather than FIEs employing skilled workers. FIEs are found to generate negative spillovers through exports and through employment of skilled workers.