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Title: Determinants of foreign direct investment across China
Authors: Sun, Q.
Tong, W.
Yu, Q. 
Keywords: Agglomeration
Foreign direct investment
Foreign portfolio investment
Location theory
Issue Date: 2002
Citation: Sun, Q., Tong, W., Yu, Q. (2002). Determinants of foreign direct investment across China. Journal of International Money and Finance 21 (1) : 79-113. ScholarBank@NUS Repository.
Abstract: We analyze the spatial and temporal variation in foreign direct investment (FDI) among China's 30 provinces from 1986 to 1998. Motivated by Naughton (Brooklings Pap Econo Activ 2 (1996) 273), we distinguish our study from similar studies by examining changes in importance of FDI determinants through time. We do find supporting evidence. This is due to the shift in the nature of FDI in China. We also find that the cumulative FDI relative to cumulative domestic investment has a negative impact on the new FDI. Provincial officials have to improve the investment environment. Otherwise, multinational corporations may choose to invest in provinces with fewer FDI competitors. Our analysis is robust across different specifications. However, it explains the FDI distribution in the coastal provinces better than it does for Central and Western provinces. ©2002 Elsevier Science Ltd. All rights reserved.
Source Title: Journal of International Money and Finance
ISSN: 02615606
DOI: 10.1016/S0261-5606(01)00032-8
Appears in Collections:Staff Publications

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