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Interdépendance de l'investissement étranger et de la croissance en Chine - Une analyse sur données de panel

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  • Sylvie DEMURGER

Abstract

This article uses a model based on simultaneous equations to examine the relationship between foreign investment and economic growth in Chinese provinces from 1985 to 1995. Although the positive effect of such investment in promoting growth is highlighted by most empirical studies on China, the question of whether an inverse relationship may exist is seldom, if ever, discussed. Using data for a sample of 24 Chinese provinces throughout the 1985-95 period, this paper first shows that the hypothesis that foreign investment is exogenous should be rejected, which in turn entails a need to estimate a growth model comprising a system of simultaneous equations. Such an estimation then confirms, most notably, the fundamental role played by foreign investment in regional economic growth in China. It also serves to underline the importance of the potential for future growth in explaining foreign investment decisions.

Suggested Citation

  • Sylvie DEMURGER, 1997. "Interdépendance de l'investissement étranger et de la croissance en Chine - Une analyse sur données de panel," Working Papers 199706, CERDI.
    • Handle: RePEc:cdi:wpaper:48
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    1. Balasubramanyam, V N & Salisu, M & Sapsford, David, 1996. "Foreign Direct Investment and Growth in EP and IS Countries," Economic Journal, Royal Economic Society, vol. 106(434), pages 92-105, January.
    2. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
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    Cited by:

    1. Grigoriou, Christopher & Guillaumont, Patrick & Yang, Wenyan, 2005. "Child mortality under Chinese reforms," China Economic Review, Elsevier, vol. 16(4), pages 441-464.

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