China's economic transition is essentially a two-pronged decentralisation process: power and fiscal decentralisation from central to local government and shift of decision making from governments to firms and households. Using FDI flow data at the provincial level from 1995 to 2002, this study finds that provinces with more authority in economic matters and hardening fiscal budget constraints have a larger FDI inflow. Market decentralisation may significantly improve the investment environment and attract foreign investment while government interference in economic activities could discourage foreign investment. In addition, more legal spending in a province is associated with a smaller FDI inflow while subsidies to loss-making SOEs could bring more foreign investment.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).
Related research
Keywords:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)