How important is foreign capital to income growth in China and India?
The picture often painted is that foreign capital inflows in China and India are prominently linked to rapid growth at the national level, and contribute to widening income disparities at the provincial/state level. In this paper we revisit Krugmanï¿½s (1993) contention that foreign capital can hardly be considered an important income growth driver, when in most developing countries it only accounts for a fractional share of gross capital formation. In the case of contemporary China and India, the data suggests that Krugmanï¿½s critique holds largely true, even in the coastal regions that are considered magnets for foreign investment. Thus, domestic factors, rather than the driving forces of globalization, appear to be the more important determinants of income growth in both countries.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: St. Lucia, Qld. 4072|
Phone: +61 7 3365 6570
Fax: +61 7 3365 7299
Web page: http://www.uq.edu.au/economics/
More information through EDIRC
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.:
- Colin G. Brown & Scott A. Waldron & John W. Longworth, 2005. "Rural development in China: Industry policy, regionalism, integration and scale," International Journal of Social Economics, Emerald Group Publishing, vol. 32(1/2), pages 17-33, January.
- Pami Dua & Aneesa I. Rashid, 1998.
"Foreign Direct Investment and Economic Activity in India,"
Indian Economic Review,
Department of Economics, Delhi School of Economics, vol. 33(2), pages 153-168, July.
- Pami Dua & Aneesa I. Rashid, 1999. "Foreign Direct Investment and Economic Activity in India," Working papers 62, Centre for Development Economics, Delhi School of Economics.
- Chandana Chakraborty & Parantap Basu, 2002. "Foreign direct investment and growth in India: a cointegration approach," Applied Economics, Taylor & Francis Journals, vol. 34(9), pages 1061-1073.
- Sadhana Srivastava & Rahul Sen, 2004. "Competing for Global FDI: Opportunities and Challenges for the Indian Economy," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 5(2), pages 233-260, September.
- Xiaobo Zhang & Kevin Zhang, 2003. "How Does Globalisation Affect Regional Inequality within A Developing Country? Evidence from China," Journal of Development Studies, Taylor & Francis Journals, vol. 39(4), pages 47-67.
- Levine, Ross, 2001. "International Financial Liberalization and Economic Growth," Review of International Economics, Wiley Blackwell, vol. 9(4), pages 688-702, November.
- Xing, Yuqing & Zhang, Kevin Honglin, 2004. "FDI and Regional Income Disparity in Host Countries: Evidence from China," Economia Internazionale / International Economics, Camera di Commercio di Genova, vol. 57(3), pages 363-379.
- Nirvikar Singh & T.N. Srinivasan, 2004. "Indian Federalism, Economic Reform and Globalization," Public Economics 0412007, EconWPA.
When requesting a correction, please mention this item's handle: RePEc:qld:uqeaer:04. 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: (SOE IT)
If references are entirely missing, you can add them using this form.