Changes in Technical Efficiency of FDI

The research in this chapter aims to to identify whether productivity growth attributes to technical progress or efficiency improvement with introduction of FDI in different regions of China and to measure technical efficiency in less developed regions with different strategies. It finds out technical progress in Eastern region is significant with FDI path because the declining trend of technical level is reversed after 1994. Unfortunately, the technical progress does not appear in either Middle or Western region. The TFP growth with FDI path is mainly attributed to technical progress rather than efficiency improvement in both Eastern and Middle regions. Furthermore, realizations of technical progress are obtained with path-converged design in Middle and Western regions.