Corruption, Governance and FDI Location in China: A Province-Level Analysis

Matthew Cole, Robert Elliott () and Jing Zhang

Discussion Papers from Department of Economics, University of Birmingham

Abstract: China's rapid growth in recent years has been matched by large increases in exports and foreign direct investment (FDI). However, within China considerable regional disparities in FDI flows exist. In this paper we use detailed province level data for China to examine the determinants of intra-country FDI flows. Specifically, we investigate whether FDI is attracted to those regions that exhibit good governance and are most strongly engaged in the fight against corruption. We first construct proxies for provincial government efficiency and the extent of a region's anti-corruption effort. Our subsequent regression results confirm that FDI is attracted to provinces with relatively high levels of government efficiency and those that are actively involved in the fight against corruption.

Keywords: FDI; corruption; governance (search for similar items in EconPapers)
JEL-codes: L60 O13 Q21 Q25 Q28 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2009-11
New Economics Papers: this item is included in nep-dev, nep-int, nep-pol, nep-soc and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (72)

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https://repec.cal.bham.ac.uk/pdf/09-14.pdf

Related works:
Journal Article: Corruption, Governance and FDI Location in China: A Province-Level Analysis (2009)
Working Paper: Corruption, Governance and FDI Location in China: A Province-Level Analysis (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:bir:birmec:09-14

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