Chinese economic development, the next stage: outward FDI?
China's development path has been widely recognised as being unique, with gradual privatisation and marketisation, massive private capital inflows, and extensive exporting. All this has been achieved without political democratisation. This paper draws attention to a new emerging phenomenon--significant Chinese levels of outward FDI (OFDI)--and takes a first step towards understanding this development at an aggregate level. The question arises, is China's OFDI another unique characteristic of Chinese distinctive economic development path and reform policies, or does it follow an established, universal pattern, specifically Dunning's investment development path (IDP) hypothesis, or rather a refined version of the IDP? In other words, do Chinese OFDI patterns suggest refinements to established theories, or even their refutation? To address these questions, however, exogeneity tests reveal a need to use GMM estimation methods rather than straightforward regressions, since relations between economic development and OFDI are complex and inter-dependent. The GMM results suggest that the level of economic development, proxied by GDP per capita plus refinements, is still the main factor explaining China's rate of OFDI. This is quite consistent with the refined IDP hypothesis and patterns broadly noted elsewhere. Conclusions are drawn for theory, policy and international business.
Volume (Year): 14 (2005)
Issue (Month): 1 (February)
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/bibliographic|
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.:
- Frank Barry & Holger Görg & Andrew McDowell, 2001.
"Outward FDI and the investment development path of a late-industrialising economy : evidence from Ireland,"
200108, School of Economics, University College Dublin.
- Frank Barry & Holger Gorg & Andrew Mcdowell, 2003. "Outward FDI and the Investment Development Path of a Late-industrializing Economy: Evidence from Ireland," Regional Studies, Taylor & Francis Journals, vol. 37(4), pages 341-349.
- Trevino, Len J. & Grosse, Robert, 2002. "An analysis of firm-specific resources and foreign direct investment in the United States," International Business Review, Elsevier, vol. 11(4), pages 431-452, August.
- Robert G. King & Charles I. Plosser & James H. Stock & Mark W. Watson, 1991.
"Stochastic trends and economic fluctuations,"
Working Paper Series, Macroeconomic Issues
91-4, Federal Reserve Bank of Chicago.
- Buck, Trevor & Filatotchev, Igor & Nolan, Peter & Wright, Mike, 2000. "Different paths to economic reform in Russia and China: causes and consequences," Journal of World Business, Elsevier, vol. 35(4), pages 379-400, January.
- Toda, Hiro Y & Phillips, Peter C B, 1993.
"Vector Autoregressions and Causality,"
Econometric Society, vol. 61(6), pages 1367-93, November.
- Yun-Wing Sung, 1996. "Chinese Outward Investment in Hong Kong: Trends, Prospects and Policy Implications," OECD Development Centre Working Papers 113, OECD Publishing.
- Henry Wai-Chung Yeung, 1998. "Transnational Economic Synergy and Business Networks: The Case of Two-way Investment Between Malaysia and Singapore," Regional Studies, Taylor & Francis Journals, vol. 32(8), pages 687-706.
- James Love & Francisco Lage-Hidalgo, 2000. "Analysing the determinants of US direct investment in Mexico," Applied Economics, Taylor & Francis Journals, vol. 32(10), pages 1259-1267.
- Barro, Robert J & Lee, Jong-Wha, 2001.
"International Data on Educational Attainment: Updates and Implications,"
Oxford Economic Papers,
Oxford University Press, vol. 53(3), pages 541-63, July.
- Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment Updates and Implications," NBER Working Papers 7911, National Bureau of Economic Research, Inc.
- Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment: Updates and Implications," CID Working Papers 42, Center for International Development at Harvard University.
- Zhou, Dongsheng & Li, Shaomin & Tse, David K., 2002. "The impact of FDI on the productivity of domestic firms: the case of China," International Business Review, Elsevier, vol. 11(4), pages 465-484, August.
- Bevan, Alan & Estrin, Saul & Meyer, Klaus, 2004. "Foreign investment location and institutional development in transition economies," International Business Review, Elsevier, vol. 13(1), pages 43-64, February.
- Robert Grosse & Len J Trevino, 1996. "Foreign Direct Investment in the United States: An Analysis by Country of Origin," Journal of International Business Studies, Palgrave Macmillan, vol. 27(1), pages 139-155, March.
- Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
- Pangarkar, Nitin & Lim, Hendry, 2003. "Performance of foreign direct investment from Singapore," International Business Review, Elsevier, vol. 12(5), pages 601-624, October.
When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:14:y:2005:i:1:p:97-115. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.