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Targettng Transaction Costs: An Evaluation of Investment Incentive Policies in China's Foreign Trade Zones

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  • Ying, Yvonne
  • Rozelle, Scott
  • Barlow, Melinda

Abstract

This paper explores the effectiveness of incentive policies in attracting foreign investment in China's recently opened "free" economic zones. A transaction costminimization conceptual framework is used to specify an empirical model. Crosssection data from 132 regions are used for testing the hypothesis that transaction cost-reducing policies are more effective in attracting investment than other tax incentive and promotional policies. The hypothesis is validated.

Suggested Citation

  • Ying, Yvonne & Rozelle, Scott & Barlow, Melinda, 1991. "Targettng Transaction Costs: An Evaluation of Investment Incentive Policies in China's Foreign Trade Zones," 1991 Annual Meeting, August 4-7, Manhattan, Kansas 271349, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea91:271349
    DOI: 10.22004/ag.econ.271349
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    References listed on IDEAS

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    1. George J. Stigler, 1967. "Imperfections in the Capital Market," Journal of Political Economy, University of Chicago Press, vol. 75(3), pages 287-287.
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