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The effects of inward and outward foreign direct investment on manufacturing export sophistication in China

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  • Chen Li
  • Chunyan Liu
  • Jun Zhao

Abstract

This article focuses on the effects of inward and outward FDI on manufacturing export sophistication in China by using the two-tier stochastic frontier model. The results show that inward and outward FDI has a stronger positive effect on China’s manufacturing export sophistication. Furthermore, the effects decomposition indicates that the net effect of inward and outward FDI on manufacturing export sophistication varies markedly across quantiles and regions. At the upper quartiles (Q3) and Eastern Zone, the positive net effect is more obvious than others. This illustrates that inward and outward FDI plays a significant role in driver export upgrading.

Suggested Citation

  • Chen Li & Chunyan Liu & Jun Zhao, 2021. "The effects of inward and outward foreign direct investment on manufacturing export sophistication in China," Applied Economics Letters, Taylor & Francis Journals, vol. 28(20), pages 1758-1766, November.
    • Handle: RePEc:taf:apeclt:v:28:y:2021:i:20:p:1758-1766
    DOI: 10.1080/13504851.2020.1854429
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