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On the Performance of Foreign Direct Investment in China: 1981-2004

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  • Mingming Jiang

    (University of California, Riverside)

Abstract

This paper centers on the measurement of the time-varying efficiency of foreign direct investment (FDI) in China from 1981 to 2004. I modify the standard stochastic production frontier approach to isolate the estimate of the technical efficiency of FDI. The estimations show that the FDI technical efficiency exhibits a U-shaped time pattern, i.e., there is efficiency deterioration in the early stage of China's reform and a gradual efficiency improvement after the mid-1990s. However, this U-shaped time pattern disappears when technical change (changing frontier) is taken into account.

Suggested Citation

  • Mingming Jiang, 2012. "On the Performance of Foreign Direct Investment in China: 1981-2004," Economics Bulletin, AccessEcon, vol. 32(4), pages 3320-3332.
    • Handle: RePEc:ebl:ecbull:eb-12-00567
    as

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    References listed on IDEAS

    as
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    3. Wu, Yanrui, 2000. "Measuring the performance of foreign direct investment: a case study of China," Economics Letters, Elsevier, vol. 66(2), pages 143-150, February.
    4. Luiz R. de Mello Jr., 1997. "Foreign Direct Investment in Developing Countries: A Selective Survey," Studies in Economics 9701, School of Economics, University of Kent.
    5. Kumbhakar, Subal C., 1990. "Production frontiers, panel data, and time-varying technical inefficiency," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 201-211.
    6. Camilla Mastromarco, 2008. "Foreign Capital And Efficiency In Developing Countries," Bulletin of Economic Research, Wiley Blackwell, vol. 60(4), pages 351-374, October.
    7. Mao, Weining & Koo, Won W., 1997. "Productivity growth, technological progress, and efficiency change in chinese agriculture after rural economic reforms: A DEA approach," China Economic Review, Elsevier, vol. 8(2), pages 157-174.
    8. Ying Chu Ng & Sung Ko Li, 2000. "Measuring the Research Performance of Chinese Higher Education Institutions: An Application of Data Envelopment Analysis," Education Economics, Taylor & Francis Journals, vol. 8(2), pages 139-156.
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    Keywords

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    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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