The Determinants of Foreign Direct Investment (FDI): the Case of the Chinese Provinces during the Economic Transition

Mario Biggeri

No 1211, Working Papers from c.MET-05 - Centro Interuniversitario di Economia Applicata alle Politiche per L'industria, lo Sviluppo locale e l'Internazionalizzazione

Abstract: Foreign Direct Investment (FDI) is considered a relevant factor of Chinese economic growth particularly for the coastal region. The aim of this paper is to understand what determined the location of FDI in China during the economic transition from the early 1980’s up to the Asian crisis. In order to examine which factors affected the amount of FDI received by the provinces an empirical analysis based is carried out. The estimates are obtained through a panel analysis utilising a panel data set at provincial level. The empirical findings emphasise that in addition to factors usually considered in the literature -such as market access, market profitability, strategic location, production costs, factor endowments, agglomeration effect, policy promotion, political stability, etc. …- a higher FDI inflow is determined also by the level of institutional changes towards marketisation.

Keywords: Foreign direct investment; China; Economics of transition (search for similar items in EconPapers)
JEL-codes: F21 P2 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2012-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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