Infrastructure and sectoral FDI in China: an empirical analysis

In this paper, for the first time, we investigate relationship between infrastructure and sectoral distribution of FDI inflow in China. We use Estimating Autoregressive Distributed Lag (ARDL) bound testing Vector Error Correction Model (VECM) procedures estimation. To unmask shortcomings previous literature, a composite index with more than 30 indicators. The results show that there is long-run infrastructure. A bidirectional causal confirmed by using VECM. However, find unidirectional causality primary sector's infrastructure, it running from to sector FDI. inclusion control variables, e.g., institutional quality, trade openness, domestic investment, robust our analysis. positive role inflows utmost importance policymakers Chinese-government. Several policy implications are given study.