Foreign Direct Investment across China: what should we learn from spatial dependences?
AbstractThe paper investigates the importance of spatial dependences on Foreign Direct Investment (FDI) localization across Chinese provinces over the 1992-2009. Based on exploratory spatial data analysis, spatial sigma-convergence and spatial Durbin specifications, we present a much clearer picture of FDI dispersion and spatial convergence across China by highlighting the spillover effects of FDI localization in Chinese provinces and regions. Our results are threefold. First, FDI convergence is more pronounced compared to the Central region, whereas the dispersion is greater when the Coastal and the Western regions are taken as reference points. Second, at the province level, FDI localization seems to present a substitutable configuration. Third, when controlling for the spatial distribution of FDI at the level of regions, it seems, conversely, that the FDI localization presents a complementary configuration. The finding resulting from the opposing configurations of the FDI localizations observed at the region and province levels seems to argue in favor of promoting FDI attractiveness policies based on regional complementarities.
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Date of creation: 31 Oct 2013
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China; Convergence; FDI; spatial panel data; spatial Durbin model;
Other versions of this item:
- Cécile BATISSE & Mary-Françoise RENARD & Nasser ARY TANIMOUNE, 2013. "Foreign Direct Investment across China: what should we learn from spatial dependences?," Working Papers 201312, CERDI.
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-14 (All new papers)
- NEP-CSE-2013-11-14 (Economics of Strategic Management)
- NEP-GEO-2013-11-14 (Economic Geography)
- NEP-TRA-2013-11-14 (Transition Economics)
- NEP-URE-2013-11-14 (Urban & Real Estate Economics)
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