Determinants of Inflow of Foreign Direct Investment in Hungary and China: Time-Series Approach

Zhen Quan Wang and Nigel Swain
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Zhen Quan Wang: The University of Liverpool, UK, Postal: The University of Liverpool, UK
Nigel Swain: The University of Liverpool, UK, Postal: The University of Liverpool, UK

Journal of International Development, 1997, vol. 9, issue 5, 695-726

Abstract: This paper analyses what factors best explain foreign capital inflows into Hungary and China during the period 1978-92. The size of the host country markets is found to play a positive role, while the cost of capital variables and political instability are negatively correlated with investment inflows. It supports the hypothesis that low-cost labour and currency depreciation are important factors in explaining how much foreign capital inflows into a particular country. There is little evidence to support classical hypotheses concerning tariff barriers and imports variables. The OECD growth rates show significant positive correlation with foreign direct investment in Hungary. © 1997 John Wiley & Sons, Ltd.

Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jintdv:v:9:y:1997:i:5:p:695-726

DOI: 10.1002/(SICI)1099-1328(199707)9:5<695::AID-JID294>3.0.CO;2-N

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