The Impact of Inward FDI on the Performance of Chinese Manufacturing Firms

Recent years have witnessed the emergence of China as one of the most important destinations for foreign direct investment (FDI), which reached US$403.98 billion by the end of 1999 (MOFTEC, 2000). China is now the largest recipient of FDI in the developing world. However, the amount of FDI will underestimate its overall consequences if spillover effects are significant (Murphy, 1992; O’Malley, 1994; Buckwalter, 1995). This study investigates the impact of FDI on the performance of Chinese locally owned firms in manufacturing.