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Economic growth, local industrial development and inter-regional spillovers from foreign direct investment: Evidence from China

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  • Ouyang, Puman
  • Fu, Shihe

Abstract

In many countries inward foreign direct investment (FDI) typically concentrates in a few regions. However, there is little empirical evidence on whether spatially concentrated FDI boosts economic growth in other regions within the same country. We use a dataset that covers 96% of Chinese cities from 1996 to 2004 and find that “inter-regional spillovers” from FDI concentrated in China's coastal cities have a positive and significant effect on the growth of inland cities. In addition, an inland city's industrial development affects its absorptive capacity to gain such inter-regional spillovers from coastal FDI.

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Bibliographic Info

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 23 (2012)
Issue (Month): 2 ()
Pages: 445-460

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Handle: RePEc:eee:chieco:v:23:y:2012:i:2:p:445-460

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Web page: http://www.elsevier.com/locate/chieco

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Keywords: Foreign direct investment; Regional inequality; Inter-regional spillovers; Absorptive capacity; Growth;

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Cited by:
  1. KARGI, Bilal, 2014. "Portfolio in Turkish Economy, and A Long Termed Relation Between Foreign Direct Investments and The Growth, and The Structural Breakage Analysis (1980-2012)," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 70-81.
  2. Nasser Ary Tanimoune & Cécile Batisse & Mary-Françoise Renard, 2013. "Foreign Direct Investment across China: what should we learn from spatial dependences?," Working Papers halshs-00878888, HAL.
  3. Akpan Uduak & Isihak Salisu & Asongu Simplice, 2014. "Determinants of Foreign Direct Investment in Fast-Growing Economies: A Study of BRICS and MINT," Working Papers 14/002, African Governance and Development Institute..

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