Productivity Spillovers among OECD, Diaspora and Indigenous Firms in Chinese Manufacturing

It is the conventional wisdom that productivity spillovers from home based to foreign owned firms occur only in the economies of developed countries. This paper argues that there are exceptions to the conventional wisdom. Given the importance of indigenous knowledge in productivity enhancement, spillovers could occur from domestically owned to foreign owned firms in developing countries. Given their unique position, diaspora firms could play a special role in facilitating such reverse spillovers. These propositions are tested in the context of the OECD, diaspora and domestically owned firms in China, utilising data relating to a sample of firms in China’s manufacturing sector.