This book provides an insightful exploration of whether foreign direct investment (FDI) can promote the productivity of domestic enterprises. The book is based on a series of dedicated research conducted in the context of the Chinese economy, which has been the largest FDI host among the developing economies since 1993.

The main themes of this book are (a) based on the latest literature and first-hand research, outlining possible mechanisms through which foreign direct investment could promote the productivity of domestic enterprises; (b) developing a comprehensive research framework to quantify the spillover effects with cutting-edge methodology; (c) constructing a decision support system for evaluating FDI policy reforms with advanced computer simulation techniques; (d) evaluating the broader impact of FDI spillovers on banking system and trade pattern.

The book examines topical economic issues in the contemporary world economy from innovative perspectives, namely, how the presence of multinational enterprises has been one of the most important microeconomic drivers for the Chinese economy, how foreign banks have helped to enable Chinese banking system survive the global financial crisis, and how the domestic enterprises have learned to do exports from multinational affiliates and have changed the landscape of U.S.-Asian trade. The book incorporates the latest development of economic theory as well as computational economics model.