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The Determinants of Foreign Direct Investment (FDI): the Case of the Chinese Provinces during the Economic Transition

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  • Mario Biggeri

    (Università degli Studi di Firenze)

Abstract

Foreign Direct Investment (FDI) is considered a relevant factor of Chinese economic growth particularly for the coastal region. The aim of this paper is to understand what determined the location of FDI in China during the economic transition from the early 1980’s up to the Asian crisis. In order to examine which factors affected the amount of FDI received by the provinces an empirical analysis based is carried out. The estimates are obtained through a panel analysis utilising a panel data set at provincial level. The empirical findings emphasise that in addition to factors usually considered in the literature -such as market access, market profitability, strategic location, production costs, factor endowments, agglomeration effect, policy promotion, political stability, etc. …- a higher FDI inflow is determined also by the level of institutional changes towards marketisation.

Suggested Citation

  • Mario Biggeri, 2012. "The Determinants of Foreign Direct Investment (FDI): the Case of the Chinese Provinces during the Economic Transition," Working Papers 1211, c.MET-05 - Centro Interuniversitario di Economia Applicata alle Politiche per L'industria, lo Sviluppo locale e l'Internazionalizzazione.
    • Handle: RePEc:cme:wpaper:1211
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    References listed on IDEAS

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    Cited by:

    1. Mauricio Zelaya & Ayse Yüce, 2014. "Foreign Direct Investment Decisions into China and India," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(3), pages 300-316, March.
    2. Le Quoc Liem & Wang Lai Wang, 2014. "Decision making in foreign direct investment: Cases for China and India," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 4(4), pages 209-220, April.

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    More about this item

    Keywords

    Foreign direct investment; China; Economics of transition;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

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