DIRECT EFFECT OF INWARD FDI AND TARGET FIRM PERFORMANCE: EVIDENCE WITH CHINESE FIRM-LEVEL DATA

Se Chen and Mingxian Li ()
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Se Chen: School of Economics, Hunan Agricultural University, Changsha 410128, P. R. China2Department of Economics, University of Essex, Colchester CO4 3SQ, UK
Mingxian Li: School of Economics, Hunan Agricultural University, Changsha 410128, P. R. China

The Singapore Economic Review (SER), 2020, vol. 65, issue 04, 969-1005

Abstract: This paper uses Chinese firm-level data from 2001 to 2007 and applies a propensity score matching method combined with a difference-in-differences approach to examine the direct causal link between inward foreign direct investment (FDI) and various aspects of Chinese firms’ performance. We divide China into four economic regions and subdivide the origin of foreign investment into HMT investment (within the Greater China Area) and other foreign investment (outside the Greater China Area). The results indicate that the progress of the IFDI market in China is not evenly balanced within the four economic regions, while the different origins of foreign investment produce different effects.

Keywords: Inward foreign direct investment; Chinese firms; direct effect; four economic regions (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1142/S0217590819500346

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