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Foreign Direct Investment across China: what should we learn from spatial dependences?

Author

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  • Nasser Ary Tanimoune

    (School of International Development and Global Studies, University of Ottawa (Canada) - School of International Development and Global Studies, University of Ottawa (Canada) - University of Ottawa [Ottawa] - School of International Development and Global Studies)

  • Cécile Batisse

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Mary-Françoise Renard

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

Abstract

The paper investigates the importance of spatial dependences on Foreign Direct Investment (FDI) localization across Chinese provinces over the 1992-2009. Based on exploratory spatial data analysis, spatial sigma-convergence and spatial Durbin specifications, we present a much clearer picture of FDI dispersion and spatial convergence across China by highlighting the spillover effects of FDI localization in Chinese provinces and regions. Our results are threefold. First, FDI convergence is more pronounced compared to the Central region, whereas the dispersion is greater when the Coastal and the Western regions are taken as reference points. Second, at the province level, FDI localization seems to present a substitutable configuration. Third, when controlling for the spatial distribution of FDI at the level of regions, it seems, conversely, that the FDI localization presents a complementary configuration. The finding resulting from the opposing configurations of the FDI localizations observed at the region and province levels seems to argue in favor of promoting FDI attractiveness policies based on regional complementarities.

Suggested Citation

  • Nasser Ary Tanimoune & Cécile Batisse & Mary-Françoise Renard, 2013. "Foreign Direct Investment across China: what should we learn from spatial dependences?," CERDI Working papers halshs-00878888, HAL.
    • Handle: RePEc:hal:cdiwps:halshs-00878888
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00878888
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    1. Wei Feng & Yanrui Wu & Yue Fu, 2021. "Dialect Diversity and Foreign Direct Investment in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(2), pages 49-72, March.

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    More about this item

    Keywords

    China; Convergence; FDI; spatial panel data; spatial Durbin model;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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