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Did FDI Really Cause Chinese Economic Growth? A Meta-Analysis

Philip Gunby, Yinghua Jin and W. Reed

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: Foreign direct investment (FDI) has been linked to economic growth in a number of countries. Productivity spillovers at the firm level have been identified as a key element in the process by which FDI stimulates economic growth. Moreover, there is evidence of FDI-related productivity spillovers in China. Whether these spillovers have been of sufficient size to affect growth at the aggregate level, however, is an empirical question. We apply meta-analysis to the corresponding empirical literature to find an answer. Our main finding is that the effect of FDI on Chinese economic growth is much smaller than one would expect from a naïve aggregation of existing estimates. Publication bias and a profusion of estimates based on less preferred study and sample characteristics have served to inflate observed estimates. Once these effects are accounted for, the estimated effect of FDI on Chinese economic growth is reduced to statistical insignificance. This suggests that the cause(s) of the Chinese “economic miracle” likely lie elsewhere.

Keywords: Meta-analysis; FDI; China; economic growth (search for similar items in EconPapers)
JEL-codes: F21 O11 O53 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2016-07-26
New Economics Papers: this item is included in nep-cna, nep-cse, nep-eff, nep-hme, nep-int, nep-tid and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Did FDI Really Cause Chinese Economic Growth? A Meta-Analysis (2017) Downloads
Working Paper: Did FDI Really Cause Chinese Economic Growth? A Meta-Analysis (2015) Downloads
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