On the link between Japanese ODA and FDI in China: a microeconomic evaluation using conditional logit analysis

Sur le lien entre l'aide et les IDE japonais en Chine: une évaluation microéconomique utilisant une analyse en logit conditionnel

Séverine Blaise ()
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Séverine Blaise: CEFI - Centre d'économie et de finances internationales - Université de la Méditerranée - Aix-Marseille 2 - CNRS - Centre National de la Recherche Scientifique, CEREFI - Centre d'Economie Régionale, de l'Emploi et des Firmes Internationales - Université Paul Cézanne - Aix-Marseille 3

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Abstract: This study investigates the effectiveness of Japan's official development assistance in promoting foreign direct investments inflows in the case of the People's Republic of China. Conditional logit analysis using province level statistics from 1980 to 1999, shows that Japanese aid flows did have a significant positive impact on private investors location choice even though other profit-maximizing factors such as the level of economic activity had a leading spillover effect. In a context of growing scarcity of aid, the study concludes by asserting the importance of a complementary process in which foreign aid is aimed at enhancing the development of infrastructures, acting as a pre-requisite for future direct investments. Finally, Japan providing an interesting case study, we stress the need for a better cooperation between public and private sectors in development assistance programmes.

Date: 2005
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Published in Applied Economics, 2005, 37 (1), pp.51-55. ⟨10.1080/0003684042000281534⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02379966

DOI: 10.1080/0003684042000281534

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