How does FDI affect China? Evidence from industries and provinces

Jimmy RAN; Jan Piaw, Thomas VOON; Guangzhong LI

doi:10.1016/j.jce.2007.05.001

How does FDI affect China? Evidence from industries and provinces

Jimmy RAN, Jan Piaw, Thomas VOON, Guangzhong LI

Department of Economics

Research output: Journal Publications › Journal Article (refereed) › peer-review

49 Citations (Scopus)

Abstract

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.

Original language	English
Pages (from-to)	774-799
Number of pages	26
Journal	Journal of Comparative Economics
Volume	35
Issue number	4
DOIs	https://doi.org/10.1016/j.jce.2007.05.001
Publication status	Published - 1 Dec 2007

Bibliographical note

We all would like to thank Ronald Balvers and two anonymous referees for their good suggestions and helpful comments. Jimmy Ran appreciates all the research support from Chinese Academy of Finance and Development when he paid his visit during his study leave.

Funding

Guangzhong Li would like to acknowledge the financial support from the Chinese National Social Science for the project “The Impact of FDI on Unemployment” (06BJY033).

Keywords

Economic growth
FDI
Industries
Net impacts
Provinces
Spillover

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.jce.2007.05.001

Cite this

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abstract = "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.",

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AB - 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.

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KW - Net impacts

KW - Provinces

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How does FDI affect China? Evidence from industries and provinces

Abstract

Bibliographical note

Funding

Keywords

UN SDGs

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