Foreign Direct Investment across China: what should we learn from spatial dependences?

Cécile Batisse (), Mary-Françoise Renard () and Nasser Ary Tanimoune ()
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Cécile Batisse: Centre d'Etudes et de Recherches sur le Développement International(CERDI)
Mary-Françoise Renard: Centre d'Etudes et de Recherches sur le Développement International(CERDI)

No 201312, Working Papers from CERDI

Abstract: The paper investigates the importance of spatial dependences on Foreign Direct Investment (FDI) localization across Chinese provinces over the 1992-2009. Based on exploratory spatial data analysis, spatial sigma-convergence and spatial Durbin specifications, we present a much clearer picture of FDI dispersion and spatial convergence across China by highlighting the spillover effects of FDI localization in Chinese provinces and regions. Our results are threefold. First, FDI convergence is more pronounced compared to the Central region, whereas the dispersion is greater when the Coastal and the Western regions are taken as reference points. Second, at the province level, FDI localization seems to present a substitutable configuration. Third, when controlling for the spatial distribution of FDI at the level of regions, it seems, conversely, that the FDI localization presents a complementary configuration. The finding resulting from the opposing configurations of the FDI localizations observed at the region and province levels seems to argue in favor of promoting FDI attractiveness policies based on regional complementarities.

Keywords: FDI; Convergence; China; Spatial panel data; Spatial Durbin model (search for similar items in EconPapers)
JEL-codes: C33 O53 R12 (search for similar items in EconPapers)
Pages: 25
Date: 2013
New Economics Papers: this item is included in nep-geo, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Foreign Direct Investment across China: what should we learn from spatial dependences? (2013)
Working Paper: Foreign Direct Investment across China: what should we learn from spatial dependences? (2013)
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