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Sectoral Location of FDI in China

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  • Lin, Mi
  • Kwan, Yum K.
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Abstract

This paper investigates the determinants of FDI sectoral allocation in 29 China’s manufacturing sectors from 2000 to 2007. We find that FDI sectoral allocation has a strong self-reinforcing effect. MNCs with ownership advantages tend to invest more in local high productivity sectors. The FDI presence, however, is discouraged in China’s high productivity sectors in which the major market share is dominated by SOEs. We also find that the degree of FDI penetration is higher in sectors that are producing labor-intensive goods and also export-oriented.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 27088.

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Date of creation: 20 Aug 2010
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Handle: RePEc:pra:mprapa:27088

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Keywords: Foreign Direct Investment; Dynamic Panel Regression;

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