The spatial heterogeneity and time-varying nature of FDI determinants: evidence from China

Kailei Wei, Suhan Li and Chunxia Jiang

Journal of the Asia Pacific Economy, 2022, vol. 27, issue 3, 445-469

Abstract: This article explores the spatial heterogeneity and time-varying nature of FDI determinants. It also examines the impact of the Belt and Road Initiative (BRI) on regional FDI inflows. Applying both the long-term static model and the short-term dynamic model to a provincial-level dataset in China over the 1979–2018 period, we find that FDI is positively affected by market size, labour costs, openness, transport infrastructure, human capital, and the exchange rate, but negatively affected by population, and more importantly, these effects are heterogeneous across regions and over different time periods. We also find that provinces directly involved in the BRI became less attractive to foreign investors after the launch of the BRI in 2013.

Date: 2022
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DOI: 10.1080/13547860.2022.2066271

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