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Do Inland Provinces Benefit from Coastal Foreign Direct Investment in China?

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  • Chunlai Chen

Abstract

Foreign direct investment (FDI) in China is heavily concentrated in the coastal regions. Do inland provinces benefit from coastal FDI? We use a provincial-level panel dataset and employ the fixed-effects instrumental variables regression technique to investigate the interregional spillovers from coastal FDI to inland provinces. The study finds that, on average, coastal FDI has a negative impact on the economic growth of inland provinces. In addition, depending on the different trade activities engaged in (i.e. whether processing trade or ordinary trade), coastal FDI has different impacts on the economic growth of inland provinces.

Suggested Citation

  • Chunlai Chen, 2015. "Do Inland Provinces Benefit from Coastal Foreign Direct Investment in China?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 23(3), pages 22-41, May.
    • Handle: RePEc:bla:chinae:v:23:y:2015:i:3:p:22-41
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    Cited by:

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    2. Sang-Do Park, 2018. "The Nexus of FDI, R&D, and Human Capital on Chinese Sustainable Development: Evidence from a Two-Step Approach," Sustainability, MDPI, vol. 10(6), pages 1-23, June.
    3. Chunlai Chen & Yan Wu, 2019. "Interregional Impact Of Foreign Direct Investment On China’S Inland Urbanization," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(04), pages 997-1017, September.
    4. Yulia Muratova & Jakob Arnoldi & Xin Chen & Joachim Scholderer, 2018. "Political rotations and cross-province firm acquisitions in China," Asian Business & Management, Palgrave Macmillan, vol. 17(1), pages 37-58, February.
    5. Song Zhang & Chunlai Chen, 2020. "Does Outward Foreign Direct Investment Facilitate China's Export Upgrading?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(5), pages 64-89, September.
    6. Omar Abu Risha & Qingshi Wang & Mohammed Ismail Alhussam, 2023. "Impact of Foreign Enterprises’ Capital Inflow on Urbanization Factors: Evidence from Northeastern Cities of China," Sustainability, MDPI, vol. 15(21), pages 1-24, November.

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