Sectoral Location of FDI in China
The World Economy, Forthcoming
16 Pages Posted: 30 Nov 2010
Date Written: August 20, 2010
Abstract
This paper investigates the determinants of FDI sectoral allocation in 29 China’s manufacturing sectors from 2000 to 2007. We find that FDI sectoral allocation has a strong self-reinforcing effect. MNCs with ownership advantages tend to invest more in local high productivity sectors. The FDI presence, however, is discouraged in China’s high productivity sectors in which the major market share is dominated by SOEs. We also find that the degree of FDI penetration is higher in sectors that are producing labor-intensive goods and also export-oriented.
Keywords: Foreign Direct Investment, Dynamic Panel Regression
JEL Classification: F21, F23, O53
Suggested Citation: Suggested Citation
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