A spatial econometric analysis on spillovers of foreign-capital R&D activities in Fujian province of China

Using two spatial econometric models and the 2007-year cross-section data of nine cities in Fujian province of China, this paper analyzes the spillovers effect of research and development (R&D) activities from foreign direct investment in Fujian Province. The empirical results show that the foreign-capital R&D spillovers has positive spatial correlation between each other and produces obvious extrusion on the domestic enterprises, whose growth relies mainly on the investment of physical capital and labour force, especially the former, due to its own weak capacity for assimilating the advanced foreign technology.