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FDI and Industrial Restructuring in Post‐WTO Greater PRD: Implications on Regional Growth in China

Author

Listed:
  • Chyau Tuan
  • Linda Fung‐Yee Ng

Abstract

This paper aims at studying the investment flows in the Greater Pearl River Delta region (Hong Kong‐PRD) in China and its impacts on industrial restructuring at the firm‐level using a business survey with the Hong Kong‐PRD entity acted as a core‐periphery economy. The critical effects of gravity distance on transaction costs in the determination of investment flows are examined statistically by a gravity model by incorporating a hypothetical infrastructural construction project. Survey findings show that the evolution of the cross‐border operations at the main core has directed the outward FDI flows and the subsequent industrial structural adjustments of the core‐periphery economy. This paper has presented a typical illustrative case for further studies of investment flows and its impacts upon industrial adjustments and performance in other regions in China especially after the WTO accession. Its implication on regional economic growth is also discussed.

Suggested Citation

  • Chyau Tuan & Linda Fung‐Yee Ng, 2004. "FDI and Industrial Restructuring in Post‐WTO Greater PRD: Implications on Regional Growth in China," The World Economy, Wiley Blackwell, vol. 27(10), pages 1609-1630, November.
    • Handle: RePEc:bla:worlde:v:27:y:2004:i:10:p:1609-1630
    DOI: 10.1111/j.1467-9701.2004.00669.x
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    References listed on IDEAS

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    1. Chyau Tuan & Linda Fung-Yee Ng, 1998. "Export trade, trade derivatives, and economic growth of Hong Kong: a new scenario," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 7(1), pages 111-137.
    2. Ng, Linda Fung-Yee & Tuan, Chyau, 1997. "Evolving outward investment, industrial concentration, and technology change: Implications for post-1997 Hong Kong," Journal of Asian Economics, Elsevier, vol. 8(2), pages 315-332.
    3. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    4. Ng, Linda F. Y. & Tuan, Chyau, 2003. "Location decisions of manufacturing FDI in China: implications of China's WTO accession," Journal of Asian Economics, Elsevier, vol. 14(1), pages 51-72, February.
    5. Paul Krugman, 1998. "Space: The Final Frontier," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 161-174, Spring.
    6. Linda F. Y. Ng & Chyau Tuan, 2001. "FDI Promotion Policy in China: Governance and Effectiveness," The World Economy, Wiley Blackwell, vol. 24(8), pages 1051-1074, September.
    7. John M. Quigley, 1998. "Urban Diversity and Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 127-138, Spring.
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    Cited by:

    1. Jiang, Crystal X. & Yang, Qin & Li, Sali & Wang, Yong, 2011. "The moderating effect of foreign direct investment intensity on local firms' intangible resources investment and performance implications: A case from China," Journal of International Management, Elsevier, vol. 17(4), pages 291-302.
    2. Bailey, Warren B. & Cao, Xiaping & Yang, Zhenyi & Zhou, Sili, 2024. "Who leads and who follows? The cross-border peer effect in investment by Chinese and US firms," Journal of International Economics, Elsevier, vol. 147(C).
    3. Ng, Linda Fung-Yee & Tuan, Chyau, 2006. "Spatial agglomeration, FDI, and regional growth in China: Locality of local and foreign manufacturing investments," Journal of Asian Economics, Elsevier, vol. 17(4), pages 691-713, October.
    4. Luo,Xubei & Zhu,Nong, 2015. "Hub-periphery development pattern and inclusive growth : case study of Guangdong province," Policy Research Working Paper Series 7509, The World Bank.
    5. Yao, Yao & Chen, George S. & Zhang, Lin, 2021. "Local financial intermediation and foreign direct investment: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 198-216.
    6. Tuan, Chyau & Ng, Linda F.Y. & Zhao, Bo, 2009. "China's post-economic reform growth: The role of FDI and productivity progress," Journal of Asian Economics, Elsevier, vol. 20(3), pages 280-293, May.
    7. Xubei Luo & Nong Zhu, 2020. "Hub-Periphery Development Pattern and Inclusive Growth: Case Study of Guangdong Province," CIRANO Working Papers 2019s-39, CIRANO.
    8. Huang, Can & Sharif, Naubahar, 2009. "Manufacturing dynamics and spillovers: The case of Guangdong Province and Hong Kong, Macau, and Taiwan (HKMT)," Research Policy, Elsevier, vol. 38(5), pages 813-828, June.
    9. Naubahar Sharif & Can Huang, 2009. "Cross-border Investment and Economic Integration: The Case of Guangdong Province and Hong Kong SAR," Chapters, in: Wilfred Dolfsma & Geert Duysters & Ionara Costa (ed.), Multinationals and Emerging Economies, chapter 6, Edward Elgar Publishing.
    10. Tuan, Chyau & Ng, Linda Fung-Yee, 2007. "The place of FDI in China's regional economic development: Emergence of the globalized delta economies," Journal of Asian Economics, Elsevier, vol. 18(2), pages 348-364, April.

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