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Have China¡¯s FDI Policy Changes Been Successful in Reducing Its FDI Regional Disparity?

Author

Listed:
  • Kang Yu
  • Xiangyong Tan
  • Xian Xin

    () (College of Economics and Management, China Agricultural University Center for Rural Development Policy,China Agricultural University)

Abstract

From the very beginning of China¡¯s open door policy in 1979, China¡¯s preferential FDI polices have generally favored the coastal provinces, which has led to a pronounced regional disparity in FDI. Since 1992, the Chinese government has implemented a series of polices to reduce FDI regional disparity and diversify inward FDI to Western and Central provinces. This paper uses a regression-based approach to assess the contribution of China¡¯s preferential FDI policy changes toward FDI regional disparity. Our results suggest that the contribution of China¡¯s regionally preferential FDI polices in inward FDI disparity decreased from 24% in 1990 to 13% in 2005. China¡¯s preferential FDI policy changes dominate all the other factors in reducing China¡¯s inward FDI regional disparity during this period.

Suggested Citation

  • Kang Yu & Xiangyong Tan & Xian Xin, 2007. "Have China¡¯s FDI Policy Changes Been Successful in Reducing Its FDI Regional Disparity?," Working Papers 0704, China Agricultural University, College of Economics and Management.
  • Handle: RePEc:cau:wpaper:0704
    as

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    File URL: http://www.cau.edu.cn/cem/news/newsfj/2007E004.pdf
    File Function: First version, 2007
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    More about this item

    Keywords

    Foreign Direct Investment; Regional disparity; Preferential Policy;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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