The relationship between intra-industry foreign direct investment and intra-industry trade in China | Zendy

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The relationship between intra-industry foreign direct investment and intra-industry trade in China

Author(s) -

Licai Lyu,

David Blandford

Publication year - 2016

Publication title -

panoeconomicus

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.289

H-Index - 14

eISSN - 2217-2386

pISSN - 1452-595X

DOI - 10.2298/pan160726027l

Subject(s) - cointegration , granger causality , foreign direct investment , economics , china , tertiary sector of the economy , causality (physics) , manufacturing , investment (military) , intra industry trade , service (business) , monetary economics , international economics , international trade , econometrics , macroeconomics , business , economy , trade barrier , physics , quantum mechanics , marketing , politics , political science , law

This paper explores the relationship between intra-industry investment (III) and intra-industry trade (IIT) using cointegration and the Granger causality test. The empirical results indicate that there is a long-run equilibrium cointegration relationship between III and IIT in Chinese agriculture, manufacturing, the service sector and industry as a whole, and that this relationship is negative. Unidirectional Granger causality runs from III to IIT in manufacturing, the service sector and industry as a whole, but there is no strong evidence of causality running from IIT to III in any industry in China.

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