IDEAS home Printed from https://ideas.repec.org/a/kap/ecopln/v31y1998i2p175-194.html
   My bibliography  Save this article

Foreign Direct Investment in China: Determinants and Effects

Author

Listed:
  • Stèphane Dees

Abstract

This paper attempts to assess the determinants of Foreign Direct Investment (FDI) in China and its effects on the whole economy. After presenting the main theoretical contributions and the previous works done about China’s inward-FDI, an empirical study has been implemented extending the previous ones with a different data set (more recent) and with different methodologies. The traditional determinants of FDI seem to be relevant for China: domestic market size, cost advantages and openness to the rest of the world. Concerning the consequences of FDI on the Chinese economy, our empirical evidence supports the view that FDI affects China’s growth through the diffusion of ideas. Through the introduction of new ideas, multinational firms develop technical progress and hence long-run economic growth. The transmission of ideas seems to have had a positive effect on the Chinese growth. Copyright Kluwer Academic Publishers 1998

Suggested Citation

  • Stèphane Dees, 1998. "Foreign Direct Investment in China: Determinants and Effects," Economic Change and Restructuring, Springer, vol. 31(2), pages 175-194, May.
    • Handle: RePEc:kap:ecopln:v:31:y:1998:i:2:p:175-194
    DOI: 10.1023/A:1003576930461
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1023/A:1003576930461
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1023/A:1003576930461?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Romer, Paul, 1993. "Idea gaps and object gaps in economic development," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 543-573, December.
    2. Magnus Blomström & Ari Kokko & Mario Zejan, 2000. "Multinational Corporations and Spillovers," Palgrave Macmillan Books, in: Foreign Direct Investment, chapter 8, pages 101-133, Palgrave Macmillan.
    3. Kamath, Shyam J, 1990. "Foreign Direct Investment in a Centrally Planned Developing Economy: The Chinese Case," Economic Development and Cultural Change, University of Chicago Press, vol. 39(1), pages 106-130, October.
    4. James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-189, Spring.
    5. Kenneth A. Froot & Jeremy C. Stein, 1991. "Exchange Rates and Foreign Direct Investment: An Imperfect Capital Markets Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1191-1217.
    6. Härdle, Wolfgang & Marron, J. & Yang, L., 1996. "Discussion," SFB 373 Discussion Papers 1996,65, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    7. Nigel Pain & Ray Barrell, 1996. "Regionalism, innovation and the location of German direct investment," National Institute of Economic and Social Research (NIESR) Discussion Papers 91, National Institute of Economic and Social Research.
    8. Chen Chunlai, 1996. "Recent Developments in Foreign Direct Investment in China," Chinese Economies Research Centre (CERC) Working Papers 1996-03, University of Adelaide, Chinese Economies Research Centre.
    9. Xiaming Liu & Haiyan Song & Yingqi Wei & Peter Romilly, 1997. "Country characteristics and foreign direct investment in China: A panel data analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(2), pages 313-329, June.
    10. Tain-jy Chen & Yi-Ping Chen, 1995. "Foreign Direct Investment," Industry and Innovation, Taylor & Francis Journals, vol. 2(1), pages 57-68.
    11. Sayuri Shirai & Dongpei Huang, 1994. "Information Externalities Affecting the Dynamic Pattern of Foreign Direct Investment: The Case of China," IMF Working Papers 1994/044, International Monetary Fund.
    12. Barrell, Ray & Pain, Nigel, 1997. "Foreign Direct Investment, Technological Change, and Economic Growth within Europe," Economic Journal, Royal Economic Society, vol. 107(445), pages 1770-1786, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shatz, Howard J. & Venables, Anthony J., 2000. "The geography of international investment," Policy Research Working Paper Series 2338, The World Bank.
    2. Dimelis, S. & Louri-Dendrinou, Eleni, 2001. "Foreign Direct Investment and Efficiency Benefits: A Conditional Quantile Analysis," CEPR Discussion Papers 2868, C.E.P.R. Discussion Papers.
    3. Bajo-Rubio, Oscar & López-Pueyo, Carmen, 2002. "Foreign Direct Investment in a Process of Economic Integration: The Case of Spanish Manufacturing, 1986-1992," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 17, pages 85-103.
    4. Paul J. J. Welfens & Fabian J. Baier, 2018. "BREXIT and Foreign Direct Investment: Key Issues and New Empirical Findings," IJFS, MDPI, vol. 6(2), pages 1-21, April.
    5. Markusen, James R. & Venables, Anthony J., 1999. "Foreign direct investment as a catalyst for industrial development," European Economic Review, Elsevier, vol. 43(2), pages 335-356, February.
    6. Rainer Andergassen & Guido Candela, 2013. "Less Developed Countries, Tourism Investments and Local Economic Development," Review of Development Economics, Wiley Blackwell, vol. 17(1), pages 16-33, February.
    7. Greenaway, David & Görg, Holger, 2002. "Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Investment?," CEPR Discussion Papers 3485, C.E.P.R. Discussion Papers.
    8. Maria Cipollina & Giorgia Giovannetti & Filomena Pietrovito & Alberto F. Pozzolo, 2012. "FDI and Growth: What Cross-country Industry Data Say," The World Economy, Wiley Blackwell, vol. 35(11), pages 1599-1629, November.
    9. Paul Welfens, 2014. "Issues of modern macroeconomics: new post-crisis perspectives on the world economy," International Economics and Economic Policy, Springer, vol. 11(4), pages 481-527, December.
    10. Teixeira, Aurora A.C. & Tavares-Lehmann, Ana Teresa, 2014. "Human capital intensity in technology-based firms located in Portugal: Does foreign ownership matter?," Research Policy, Elsevier, vol. 43(4), pages 737-748.
    11. Linda S. Goldberg & Michael W. Klein, 1999. "International Trade and Factor Mobility: An Empirical Investigation," NBER Working Papers 7196, National Bureau of Economic Research, Inc.
    12. M. T. Alguacil & V. Orts, 2003. "Inward Foreign Direct Investment and Imports in Spain," International Economic Journal, Taylor & Francis Journals, vol. 17(3), pages 19-38.
    13. James R. Markusen & Anthony J. Venables, 1996. "Multinational Production, Skilled Labor and Real Wages," NBER Working Papers 5483, National Bureau of Economic Research, Inc.
    14. Yao, Shujie & Wei, Kailei, 2007. "Economic growth in the presence of FDI: The perspective of newly industrialising economies," Journal of Comparative Economics, Elsevier, vol. 35(1), pages 211-234, March.
    15. Azzimonti, Marina, 2019. "Does partisan conflict deter FDI inflows to the US?," Journal of International Economics, Elsevier, vol. 120(C), pages 162-178.
    16. Rafael, MONER-COLONQUES & Vicente, ORTS & José J., SEMPERE-MONERRIS, 2003. "The Strategic Role of Information Asymmetry on Demand for the Multinational Enterprise," LIDAM Discussion Papers IRES 2003002, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    17. Kose,Ayhan & Ohnsorge,Franziska Lieselotte & Ye,Lei Sandy & Islamaj,Ergys, 2017. "Weakness in investment growth : causes, implications and policy responses," Policy Research Working Paper Series 7990, The World Bank.
    18. Laura Resmini & Laura Casi, 2013. "Spatial complexity and interactions in regions' FDI attractiveness," ERSA conference papers ersa13p1063, European Regional Science Association.
    19. Argentino Pessoa, 2008. "Multinational Corporations, Foreign Investment, and Royalties and License Fees: Effects on Host-Country Total Factor Productivity," Notas Económicas, Faculty of Economics, University of Coimbra, issue 28, pages 6-31, December.
    20. Elissa Braunstein & Gerald Epstein, 2002. "Bargaining Power and Foreign Direct Investment in China: Can 1.3 Billion Consumers Tame the Multinationals?," SCEPA working paper series. 2002-13, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:ecopln:v:31:y:1998:i:2:p:175-194. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.