Foreign direct investment and economic performance in transition economies: evidence from China
Based upon a production function with FDI representing updated technology from more developed, market-based economies, this study tests the hypothesis that FDI contributes to the economic growth of less developed, transition economies via technology updating, using data for 30 Chinese provinces from 1985 to 2000. It is found that provinces with a higher FDI ratio experienced faster technology updating and more rapid economic growth. The study suggests that less developed, transition economies should encourage FDI from more developed, market-based economies so as to accelerate technology updating and economic growth.
Volume (Year): 16 (2004)
Issue (Month): 4 ()
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References listed on IDEAS
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- Nada Mora & Ratna Sahay & Jeromin Zettelmeyer & Pietro Garibaldi, 2002. "What Moves Capital to Transition Economies?," IMF Working Papers 02/64, International Monetary Fund.
- Chow, G.C., 1990.
"Capital Formation And Economic Growth In China,"
356, Princeton, Department of Economics - Econometric Research Program.
- Eden, Lorraine & Levitas, Edward & Martinez, Richard J, 1997. " The Production, Transfer and Spillover of Technology: Comparing Large and Small Multinationals as Technology Producers," Small Business Economics, Springer, vol. 9(1), pages 53-66, February.
- Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
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