 Foreign direct investment in China: a spatial econometric studyCletus Coughlin and Eran Segev No 1999-001, Working Papers from Federal Reserve Bank of St. Louis Abstract: Foreign direct investment (FDI) began to flow into China with advent of reforms in 1978. Following a period of relatively slow growth, FDI inflows to China picked up after 1990, as China surpassed every other nation but the United States in attracting foreign investment. In particular, coastal regions of China have received the bulk of FDI inflows to the country. In this paper, we use province-level data to explain the pattern of FDI location across China. We build upon previous research, introducing new potential determinants, using more recent FDI data, and incorporating spatial econometric techniques. In doing so, we test for potential econometric problems arising from the spatial pattern of the data, and correct for them by running more appropriate models. We find that economic size, labor productivity and coastal location attract FDI, while higher wages and illiteracy rates deter it. The transportation infrastructure variables we try are not found to have statistically significant relationships with the level of FDI inflows across provinces. Keywords: China; Investments, Foreign; Econometrics (search for similar items in EconPapers) Published in The World Economy, January 2000, 23(1), pp. 1-23 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlwp:1999-001 Ordering information: This working paper can be ordered from DOI: 10.20955/wp.1999.001 Access Statistics for this paper More papers in Working Papers from Federal Reserve Bank of St. Louis Contact information at EDIRC. |
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