IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v54y2022i60p6863-6874.html
   My bibliography  Save this article

Is FDI a high-quality investment? evidence from the changes in the Chinese FDI after HSR opening

Author

Listed:
  • Yiwen Shangguan
  • Wenshuo Guo

Abstract

Improving the quality of foreign direct investment (FDI) is of great importance for the Chinese economy, which has transited from high-speed growth to high-quality development. Under the background of the rapid construction of high-speed rail (HSR), this paper uses panel data from 288 prefecture-level cities in China from 2007 to 2017 and implements the time-varying difference-in-differences (DID) model to investigate the effect of the HSR opening on FDI. This study also infers the quality of FDI before HSR opening and tests whether HSR opening could improve the quality of FDI. The empirical results show that in the short period after the HSR opening, the crowding out low-quality investment caused by the opening of HSR is greater than the effect of attracting high-quality investment. Therefore, FDI decreases after the opening of HSR, indicating the FDI before HSR opening is a low-quality investment. Moreover, the opening of HSR could gradually improve the quality of FDI over time, promoting FDI to transition to a neutral investment, then to a high-quality investment. Our research suggests that the Chinese government should choose FDI with adequate evaluation, introducing the high-quality FDI to generate technology spillovers and promote the industrial upgrades.

Suggested Citation

  • Yiwen Shangguan & Wenshuo Guo, 2022. "Is FDI a high-quality investment? evidence from the changes in the Chinese FDI after HSR opening," Applied Economics, Taylor & Francis Journals, vol. 54(60), pages 6863-6874, December.
    • Handle: RePEc:taf:applec:v:54:y:2022:i:60:p:6863-6874
    DOI: 10.1080/00036846.2022.2084019
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2022.2084019
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2022.2084019?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Xiuqing & Xiao, Liming, 2024. "The impact of urban green business environment on FDI quality and its driving mechanism: Evidence from China," World Development, Elsevier, vol. 175(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:54:y:2022:i:60:p:6863-6874. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.