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Do Inland Provinces Benefit from Coastal Foreign Direct Investment in China?
Author(s) -
Chen Chunlai
Publication year - 2015
Publication title -
china and world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.815
H-Index - 28
eISSN - 1749-124X
pISSN - 1671-2234
DOI - 10.1111/cwe.12112
Subject(s) - foreign direct investment , china , panel data , investment (military) , ordinary least squares , geography , economics , international trade , international economics , business , economic geography , political science , macroeconomics , politics , archaeology , law , econometrics
Foreign direct investment (FDI) in China is heavily concentrated in the coastal regions. Do inland provinces benefit from coastal FDI? We use a provincial‐level panel dataset and employ the fixed‐effects instrumental variables regression technique to investigate the interregional spillovers from coastal FDI to inland provinces. The study finds that, on average, coastal FDI has a negative impact on the economic growth of inland provinces. In addition, depending on the different trade activities engaged in (i.e. whether processing trade or ordinary trade), coastal FDI has different impacts on the economic growth of inland provinces.