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Abstract
This paper systematically investigated the impact of foreign direct investment (FDI)
on Chinese food firms’ total factor productivity (TFP) by using the firm-level census
data between 1998 and 2007 (174,539 sample food firms). We tested for “own-plant”
effects, intra-industry effects, regional effects and vertical effects. The results show
that food firms’ foreign ownership has weakly positive or no impact on the
productivity of invested firms. At the industry level, FDI generates adverse influences
on domestic firms productivity in some sub food sectors. Further, mixed regional
effects are observed in different sub food sectors and across investment with different
origins. Finally, both positive backward and forward spillovers generated by FDI
originating outside Hong Kong, Macaw and Taiwan (HMT) are observed, while HMT
investment has negative vertical spillovers.