FDI and market entry/exit: Evidence from China
Abstract
This paper considers the impact of FDI and FDI-related spillovers on the entry and exit rates of domestic firms in mainland China's manufacturing sector. Since we suspect that aggregate results obscure differing effects based on the source of the FDI, we disaggregate FDI into that originating from Hong Kong, Macau and Taiwan (HMT) area and the rest of the world. The empirical analysis, based on 4-digit industry level panel data over the period 2003–2007, reveals that FDI originating from the rest of the world has made a significant contribution to the entry rate of domestic firms in China and the spillover effect arising from backward linkages is also positive and significant. However, FDI originating from HMT area has not encouraged domestic entry, whilst it has contributed to an increase in the exit rate of domestic firms.Download Info
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Bibliographic Info
Article provided by Elsevier in its journal Journal of Asian Economics.
Volume (Year): 23 (2012)
Issue (Month): 5 ()
Pages: 487-498
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Web page: http://www.elsevier.com/locate/asieco
Related research
Keywords: FDI; FDI-linked spillovers; Entry and exit of firms; China;Find related papers by JEL classification:
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
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Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- John P. Weche Geluebcke & Chiara Franco, 2013. "The death of German firms: What role for foreign direct investment?," Working Paper Series in Economics 264, University of Lüneburg, Institute of Economics.
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