Is foreign direct investment to China crowding out the foreign direct investment to other countries?

Laura Resmini and Iulia Siedschlag ()

China Economic Review, 2013, vol. 25, issue C, 1-16

Abstract: We estimate a theory-based modified gravity model to analyze the effects of foreign direct investment (FDI) to China on FDI to other countries over the period 1990–2004. Our results suggest that on average, ceteris paribus, FDI flows to China have been complementary to FDI flows to other countries. However, these complementarities exhibit a decreasing trend over time and vary between and within country groups. Furthermore, our results suggest that while the FDI to China has encouraged both horizontal and vertical FDI to other countries, these FDI complementarities have been strongest in the case of vertical FDI.

Keywords: Foreign direct investment; China; Multinational firms' location choice (search for similar items in EconPapers)
JEL-codes: F21 F36 F41 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:25:y:2013:i:c:p:1-16

DOI: 10.1016/j.chieco.2012.12.003

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