How important is foreign capital to income growth in China and India?
AbstractThe picture often painted is that foreign capital inflows in China and India are prominently linked to rapid growth at the national level, and contribute to widening income disparities at the provincial/state level. In this paper we revisit Krugmanï¿½s (1993) contention that foreign capital can hardly be considered an important income growth driver, when in most developing countries it only accounts for a fractional share of gross capital formation. In the case of contemporary China and India, the data suggests that Krugmanï¿½s critique holds largely true, even in the coastal regions that are considered magnets for foreign investment. Thus, domestic factors, rather than the driving forces of globalization, appear to be the more important determinants of income growth in both countries.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by School of Economics, University of Queensland, Australia in its series EAERG Discussion Paper Series with number 0405.
Date of creation:
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-10-15 (All new papers)
- NEP-CWA-2005-10-15 (Central & Western Asia)
- NEP-SEA-2005-10-15 (South East Asia)
- NEP-TRA-2005-10-15 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chandana Chakraborty & Parantap Basu, 2002. "Foreign direct investment and growth in India: a cointegration approach," Applied Economics, Taylor & Francis Journals, vol. 34(9), pages 1061-1073.
- Xing, Yuqing & Zhang, Kevin Honglin, 2004. "FDI and Regional Income Disparity in Host Countries: Evidence from China," Economia Internazionale / International Economics, Camera di Commercio di Genova, vol. 57(3), pages 363-379.
- Pami Dua & Aneesa I. Rashid, 1999.
"Foreign Direct Investment and Economic Activity in India,"
62, Centre for Development Economics, Delhi School of Economics.
- Pami Dua & Aneesa I. Rashid, 1998. "Foreign Direct Investment and Economic Activity in India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 33(2), pages 153-168, July.
- Xiaobo Zhang & Kevin Zhang, 2003. "How Does Globalisation Affect Regional Inequality within A Developing Country? Evidence from China," Journal of Development Studies, Taylor & Francis Journals, vol. 39(4), pages 47-67.
- Levine, Ross, 2001. "International Financial Liberalization and Economic Growth," Review of International Economics, Wiley Blackwell, vol. 9(4), pages 688-702, November.
- Colin G. Brown & Scott A. Waldron & John W. Longworth, 2005. "Rural development in China: Industry policy, regionalism, integration and scale," International Journal of Social Economics, Emerald Group Publishing, vol. 32(1/2), pages 17-33, January.
- Nirvikar Singh & T.N. Srinivasan, 2004. "Indian Federalism, Economic Reform and Globalization," Public Economics 0412007, EconWPA.
- Chakraborty, Chandana & Nunnenkamp, Peter, 2008. "Economic Reforms, FDI, and Economic Growth in India: A Sector Level Analysis," World Development, Elsevier, vol. 36(7), pages 1192-1212, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Randal Anderson).
If references are entirely missing, you can add them using this form.