Is FDI into China Crowding Out the FDI into the European Union?
AbstractWe estimate an augmented gravity 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 WP231.
Length: 27 pages
Date of creation: Mar 2008
Date of revision:
Foreign direct investment; China; European Union;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-15 (All new papers)
- NEP-CNA-2008-04-15 (China)
- NEP-DEV-2008-04-15 (Development)
- NEP-EEC-2008-04-15 (European Economics)
- NEP-TRA-2008-04-15 (Transition Economics)
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