Lk. Cheng et Yk. Kwan, What are the determinants of the location of foreign direct investment? The Chinese experience, J INT ECON, 51(2), 2000, pp. 379-400
By estimating the effects of the determinants of foreign direct investment
(FDI) in 29 Chinese regions from 1985 to 1995, we find that large regional
market, good infrastructure, and preferential policy had a positive effect
but wage cost had a negative effect on FDI. The effect of education was pos
itive but not statistically significant. In addition, there was also a stro
ng self-reinforcing effect of FDI on itself. There was no convergence in th
e equilibrium FDI stocks of the regions between 1985 and 1995, but there wa
s convergence in the deviations from the equilibrium FDI stocks. (C) 2000 E
lsevier Science B.V. All rights reserved.