Is FDI into China Crowding Out FDI into the European Union?
AbstractWe estimate an augmented gravity panel model to analyse the effects of FDI into China originating in OECD countries on FDI into EU and other countries over the period 1990-2004. Our results suggest that on average, ceteris paribus, over the analysed period, FDI inflows into China have been complementary to FDI inflows into EU15 countries but they have substituted FDI into the new EU countries in Central and Eastern Europe. In particular, small economies such as Bulgaria and the Baltic countries have been affected negatively by the surge in the FDI into China. This FDI diversion appears in the case of efficiency-seeking FDI.
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Bibliographic InfoPaper provided by Economic and Social Research Institute (ESRI) in its series Papers with number DYNREG25.
Date of creation: 2008
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Note: DYNREG Research Project - Dynamic Regions in a Knowledge-Driven Global Economy: Lessons and Policy Implications for the European Union
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DYNREG; Foreign direct investment; China; European Union;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-18 (All new papers)
- NEP-CNA-2008-11-18 (China)
- NEP-EEC-2008-11-18 (European Economics)
- NEP-OPM-2008-11-18 (Open Economy Macroeconomics)
- NEP-TRA-2008-11-18 (Transition Economics)
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