Does foreign direct investment crowd in or crowd out private domestic investment in China? The effect of entry mode

George Chen, Y. Yao and Julien Malizard

Post-Print from HAL

Abstract: Using quarterly data spanning from 1994Q1 to 2014Q4, we find a neutral relationship between foreign direct investment (FDI) and domestic investment in China. However, when we consider the entry mode chosen by foreign investors, we find that whilst equity joint venture (EJV) crowds in domestic investment, wholly foreign-funded enterprise (WFFE) crowds it out. Our results remain robust under alternative estimators and across different time periods. Based on these results, we argue that the Chinese government needs to actively promote the formation of EJV and uses it as the catalyst for industrial upgrading in the economy.

Keywords: ARDL bounds test; China; Domestic investment; Entry mode; Foreign direct investment (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (16)

Published in Economic Modelling, inPress, 61, pp.409-419. ⟨10.1016/j.econmod.2016.11.005⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Does foreign direct investment crowd in or crowd out private domestic investment in China? The effect of entry mode (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03124847

DOI: 10.1016/j.econmod.2016.11.005

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().