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Regional Diffferences in FDI Inflows: China – India Comparison

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  • N.S. Siddharthan

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    Abstract

    An analysis of regional differences in the flow of FDI in China and India is important as in both these countries a few regions account for the bulk of FDI inflows. There are very few studies on regional differences in FDI inflows. This paper makes an attempt to fill this gap. The main finding is that the determinants of regional distribution of FDI flows in China and India are very similar to the pattern influencing inter-country FDI flows, namely, it flows to relatively developed regions. Regions that are poor in physical, institutional and social infrastructure receive very little FDI. These regions do not attract domestic investments either. These findings raise several issues on the question of the role of FDI in economic development in developing countries.

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    Bibliographic Info

    Paper provided by eSocialSciences in its series Working Papers with number id:438.

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    Date of creation: Mar 2006
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    Handle: RePEc:ess:wpaper:id:438

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    Related research

    Keywords: FDI; foreign direct investment; China-India; regional distribution of FDI; Economics;

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    1. Yao, S. & Zhang, Z., 1999. "Regional Growth in Chine under Economic Reforms," Papers 124, Portsmouth University - Department of Economics.
    2. Mohsin Habib & Leon Zurawicki, 2002. "Corruption and Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan, vol. 33(2), pages 291-307, June.
    3. Yingqi Wei & Xiaming Liu & David Parker & Kirit Vaidya, 1999. "The Regional Distribution of Foreign Direct Investment in China," Regional Studies, Taylor & Francis Journals, vol. 33(9), pages 857-867.
    4. Zucker, Lynne G & Darby, Michael R & Brewer, Marilynn B, 1998. "Intellectual Human Capital and the Birth of U.S. Biotechnology Enterprises," American Economic Review, American Economic Association, vol. 88(1), pages 290-306, March.
    5. V N Balasubramanyam & D Sapsford & M A Salisu, . "Foreign Direct Investment and Growth," Working Papers ec13/94, Department of Economics, University of Lancaster.
    6. Canfei He, 2002. "Information costs, agglomeration economies and the location of foreign direct investment in China1," Regional Studies, Taylor & Francis Journals, vol. 36(9), pages 1029-1036.
    7. Audretsch, David B. & Lehmann, Erik E., 2005. "Does the Knowledge Spillover Theory of Entrepreneurship hold for regions?," Research Policy, Elsevier, vol. 34(8), pages 1191-1202, October.
    8. Tuan, Chyau & Ng, Linda F. Y., 2003. "FDI facilitated by agglomeration economies: evidence from manufacturing and services joint ventures in China," Journal of Asian Economics, Elsevier, vol. 13(6), pages 749-765, January.
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