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Exports foreign Direct investment and Growth in China

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  • Ping HUA

    (Centre National de la Recherche Scientifique(CNRS))

Abstract

This paper, using an export and foreign direct investment augmented production function, examines empirically the effects of these two additional variables on the economic growth of China from 1952 to 1995. Our econometric results confirm not only the contribution to growth of production factors such as labor force and domestic capital, but also the role played both by exports and FDI. Approximately two years are found to be necessary for the effects of FDI on growth. This finding may imply that the externalities resulting from transferred technologies and managerial skills are a ma or part of the contribution of FDI. Moreover, the absorptive capacity of advanced technologies is shown to depend on the level of domestic qualified labor. This, measured by education-export interaction and education-FDI interaction, is therefore an important indicator of growth. These interaction effects may need an approximate delay of three years to promote growth.

Suggested Citation

  • Ping HUA, 1997. "Exports foreign Direct investment and Growth in China," Working Papers 199707, CERDI.
    • Handle: RePEc:cdi:wpaper:50
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