CREFS Working Paper No: 99-06 Determinants of Foreign Direct Investment across China
نویسنده
چکیده
Studies of foreign direct investment (FDI) distribution in the US is voluminous but such studies on a developing country are rare. We fill the void by analyzing the spatial and temporal variation in FDI among China’s 30 provinces. We believe this is the first study of its kind. Other than some “standard” results, our pooled regression finds that the cumulative FDI has a negative impact on the new FDI. This raises the question of sustainability of China in attracting FDI. Provincial officials have to improve the investment environment. On the other hand, multinational corporations may want to invest in provinces with fewer FDI competitors. Our analysis is robust across different fixed effect specifications. However, it explains the FDI distribution in the coastal provinces better than it does for Central and Western provinces. JEL Classification: F21, F30
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