Technology Spillovers of FDI in ASEAN Sourcing from Local and Abroad

The effect of technology spillovers is widely considered as one of the main channels through which domestic firms benefit from FDI, and plays an important role in economic development of host countries. Based on the analysis framework for technology spillovers established by Borensztein, Gregorio and Lee in 1998, this paper will analyse and try to figure out the development patterns of ASEAN by utilizing time-series data between 1990 and 2008 in ASEAN countries. The empirical results render a support to the existence of technology spillovers in ASEAN, which has a positive effect on the economic development of ASEAN. China's FDI in ASEAN requires lower education threshold, also has positive effect on economy growth in six countries of ASEAN.