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Spillovers of FDI and Impact on Growth in the Densely Urbanized Area: Evidence from the Great Yangtze River Delta (1991-2010) |
WEN Yuyuan |
Institute of Regional&Urban Economics, School of Economics, Renmin University of China |
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Abstract Using panel data covering 25 cities in the great Yangtze River Delta (YRD) over the period 1991-2010, the paper applies spatial Durbin model with ML estimation techniques to examine the underlying relationship between the productivity of the host cities and FDI spillovers. The main findings are as follows, first, significant positive impacts of FDI on the local city's growth Using panel data covering 25 cities in the great Yangtze River Delta (YRD) over the period 1991-2010, the paper applies spatial Durbin model with ML estimation techniques to examine the underlying relationship between the productivity of the host cities and FDI spillovers. The main findings are as follows, first, significant positive impacts of FDI on the growth of the local city exist and increase over time, while spatial spillovers of FDI on growth are significantly negative. Second, spatial interaction plays an important and non-negligible role in the growth of cities, moreover, in a long term, the spatial interdependence is increasing over time. Third, inclusion of FDI raises the speed of conditional convergence of economic growth in YRD. Fourth, positively spatial spillover occurs in both core and peripheral regimes of YRD. The results here suggest important policy implications for YRD to attract FDI and promote urban development.
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Received: 11 March 2013
Published: 15 August 2013
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Corresponding Authors:
WEN Yuyuan
E-mail: wenyuyuan@ruc.edu.cn
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