The threshold effect between technology gaps based on the heterogeneity

The paper probes the FDI spillovers at provincial level in China. The average annual growth rate of total factor productivity of China manufacturing sectors reached 9.8% and technological progress was the main driving factor. State-owned, foreign, private manufacturing industries had appeared diverse growth rate. The private sector had the fastest rate 10.7%. There existed double-threshold values in both sectors, with values 1.060, 3.430 in state-owned enterprises and 2.2, 8.260 in private enterprises respectively. In terms of state-owned enterprises, the FDI spillover did fall as technology gap expanding. Because of inter-industry technology spillover, the spillover effect was an increasing function of technology gap in private enterprises.