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Third-Province Effects on Inbound FDI: Evidence from Chinese Provinces

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  • Mingming Pan

    (Department of Economics, Applied Statistics, and International Business, New Mexico State University, P. O. Box 30001/MSC 3CQ, Las Cruces, NM 88003-8001, USA)

Abstract

The literature of Foreign Direct Investment (FDI) determinants is broad and deep. However, no previous research has formally considered spatial linkages of regions implied by the strategies of Multi-National Enterprises (MNEs) inside a country. Inspired by the recent FDI theories emphasizing third-country effects, this research explores MNE strategies within China and the implied spatial linkages of Chinese provinces in receiving FDI. The spatial econometric estimations reveal the existence of third-province effects. The empirical evidence shows that spatial effects should not be neglected in studies of FDI determinants within a country; furthermore, hypotheses on spatial linkages cannot be rigidly borrowed from FDI theories.

Suggested Citation

  • Mingming Pan, 2016. "Third-Province Effects on Inbound FDI: Evidence from Chinese Provinces," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 42(2), pages 215-231, March.
    • Handle: RePEc:pal:easeco:v:42:y:2016:i:2:p:215-231
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