Open AccessThe relationship between intra-industry foreign direct investment and intra-industry trade in China
Author(s) -
Licai Lyu,
David Blandford
Publication year - 2019
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.