How does FDI affect China? Evidence from industries and provinces

Using the latest panel data from 19 industries and 30 provinces in China, we found it is not true that more FDI necessarily brings about more output growth across the board. Local industries without foreign participation lose while those with some participation gain from the inflow. Provinces in wes...

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Bibliographic Details
Published inJournal of Comparative Economics Vol. 35; no. 4; pp. 774 - 799
Main Authors Ran, Jimmy, Voon, Jan P., Li, Guangzhong
Format Journal Article
LanguageEnglish
Published San Diego Elsevier Inc 01.12.2007
Elsevier
Elsevier BV
SeriesJournal of Comparative Economics
Subjects
China
Economic growth
Economic impact
FDI
Foreign direct investment
Foreign investment
Industries
Industry
Net impacts
Provinces
Regional economics
Spillover
Spillovers
China
Industries
Provinces
C5
Spillover
F21
Economic growth
FDI
Net impacts
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Summary:Using the latest panel data from 19 industries and 30 provinces in China, we found it is not true that more FDI necessarily brings about more output growth across the board. Local industries without foreign participation lose while those with some participation gain from the inflow. Provinces in western and central regions lose while those in the eastern and coastal regions appear to be the major beneficiaries. While the net effect of FDI is still positive, the regional disparity has been growing. It casts doubt on the rationale of haphazard and lavish policies to compete for FDI in China. Journal of Comparative Economics 35 (4) (2007) 774–799.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0147-5967
1095-7227
DOI:10.1016/j.jce.2007.05.001