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Are Investment Promotion Agencies Doing the Thing Right? Evidence from China

Author

Listed:
  • Bin Ni

    (PhD Candidate, Graduate School of Economics, Osaka University)

Abstract

This paper tries to verify how the establishment of investment promotion agencies (IPAs) affects the decisions of foreign firms regarding their subsequent investment by combining firm-level data from the World Bank fs Enterprise Survey with city-level information on (IPAs) in China. After correcting for potential endogeneity problems, the result confirms the IPAs f role in promoting incremental foreign direct investment (FDI) into China. Furthermore, it is shown that Hong Kong, Macau, and Taiwan (HMT) firms are less sensitive to IPAs f efforts in making further investment than are non-HMT foreign firms. In addition, IPAs are found to be more successful in enhancing foreign firms f investment in high-tech than in low-tech industries.

Suggested Citation

  • Bin Ni, 2013. "Are Investment Promotion Agencies Doing the Thing Right? Evidence from China," OSIPP Discussion Paper 13E004Rev., Osaka School of International Public Policy, Osaka University, revised Jan 2015.
    • Handle: RePEc:osp:wpaper:13e004rev.
    as

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    File URL: http://www.osipp.osaka-u.ac.jp/archives/DP/2013/DP2013E004Rev.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    China; investment promotion agency; firm-level data; sample selection;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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