Abstract
By estimating the effects of the determinants of foreign direct investment (FDI) in 29 Chinese regions from 1985 to 1995, we find that large regional market, good infrastructure, and preferential policy had a positive effect but wage cost had a negative effect on FDI. The effect of education was positive but not statistically significant. In addition, there was also a strong self-reinforcing effect of FDI on itself. There was no convergence in the equilibrium FDI stocks of the regions between 1985 and 1995, but there was convergence in the deviations from the equilibrium FDI stocks. (C) 2000 Elsevier Science B.V. All rights reserved.
| Original language | English |
|---|---|
| Pages (from-to) | 379-400 |
| Number of pages | 22 |
| Journal | Journal of International Economics |
| Volume | 51 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 1 Aug 2000 |
| Externally published | Yes |
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Keywords
- Dynamic panel regression
- Foreign direct investment
- Partial stock adjustment
- Positive feedback effect
- Self-reinforcing effect
Cite this
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What are the determinants of the location of foreign direct investment? The Chinese experience. / CHENG, Leonard K.; KWAN, Yum K.
In: Journal of International Economics, Vol. 51, No. 2, 01.08.2000, p. 379-400.Research output: Journal Publications › Journal Article (refereed) › Research › peer-review
TY - JOUR
T1 - What are the determinants of the location of foreign direct investment? The Chinese experience
AU - CHENG, Leonard K.
AU - KWAN, Yum K.
PY - 2000/8/1
Y1 - 2000/8/1
N2 - By estimating the effects of the determinants of foreign direct investment (FDI) in 29 Chinese regions from 1985 to 1995, we find that large regional market, good infrastructure, and preferential policy had a positive effect but wage cost had a negative effect on FDI. The effect of education was positive but not statistically significant. In addition, there was also a strong self-reinforcing effect of FDI on itself. There was no convergence in the equilibrium FDI stocks of the regions between 1985 and 1995, but there was convergence in the deviations from the equilibrium FDI stocks. (C) 2000 Elsevier Science B.V. All rights reserved.
AB - By estimating the effects of the determinants of foreign direct investment (FDI) in 29 Chinese regions from 1985 to 1995, we find that large regional market, good infrastructure, and preferential policy had a positive effect but wage cost had a negative effect on FDI. The effect of education was positive but not statistically significant. In addition, there was also a strong self-reinforcing effect of FDI on itself. There was no convergence in the equilibrium FDI stocks of the regions between 1985 and 1995, but there was convergence in the deviations from the equilibrium FDI stocks. (C) 2000 Elsevier Science B.V. All rights reserved.
KW - Dynamic panel regression
KW - Foreign direct investment
KW - Partial stock adjustment
KW - Positive feedback effect
KW - Self-reinforcing effect
UR - http://www.scopus.com/inward/record.url?scp=0033937449&partnerID=8YFLogxK
U2 - 10.1016/S0022-1996(99)00032-X
DO - 10.1016/S0022-1996(99)00032-X
M3 - Journal Article (refereed)
VL - 51
SP - 379
EP - 400
JO - Journal of International Economics
JF - Journal of International Economics
SN - 0022-1996
IS - 2
ER -