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Geographical Factors in Determining IFDI Policy

Author

Listed:
  • Lingling WANG
  • Aysun FICICI
  • Bo FAN

    (Southern New Hampshire University, USA.)

Abstract

With the initiative of the West China Development policy, the flow of Inward Foreign Direct Investment (IFDI) gradually increased in western China. This paper investigates and tests the determinants of IFDI for western China’s11 provincesduring2002 – 2008. By compiling a pool data set and employing General Least Squares (GLS) with fixed effects model in natural logarithmic form, we explorethe IFDI in western China thoroughly. The proposed model illustrates reliable estimates of determinants of IFDI for the region. The market size, laborcosts, education level, imports and highway length are found to have a significant relationship with IFDI in western China, hence, they may be considered as determinants. On the other hand, research and development (R&D), length of railways, and postal and telecommunication services have a statistically insignificant effect on IFDI.

Suggested Citation

  • Lingling WANG & Aysun FICICI & Bo FAN, 2015. "Geographical Factors in Determining IFDI Policy," Journal of Social and Administrative Sciences, KSP Journals, vol. 2(4), pages 163-173, December.
    • Handle: RePEc:ksp:journ4:v:2:y:2015:i:4:p:163-173
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    References listed on IDEAS

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    More about this item

    Keywords

    Inward FDI determinants; Western China; Pool data.;
    All these keywords.

    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

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