Title: Sustaining growth in China's regions through FDI

Authors: Ping Zheng, Pamela A. Siler, Gianluigi Giorgioni

Addresses: Centre for International Business, University of Leeds (CIBUL), Leeds University Business School (LUBS), Maurice Keyworth Building, University of Leeds, Leeds LS2 9JT, UK. ' Division of Economics, Finance and Statistics, Dundee Business School, University of Abertay Dundee, Bell Street, Dundee DD1 1HG, UK. ' School of Accounting, Finance and Economics, Liverpool John Moores University, John Foster Building, 98 Mount Pleasant, Liverpool L3 5UZ, UK

Abstract: This paper focuses on the impact of Foreign Direct Investment (FDI) on regional economic growth in China by using an extended production function model. Panel data are employed at the province level across 29 provinces over the period 1985–1999. Provinces are then split into three macro-regions. The empirical results indicate that FDI has contributed to economic growth in all three macro-regions of China. From a policy perspective, our results suggest that the Chinese government should provide preferential policies to attract and increase FDI inflows into the vast western region. This would help maintain the country|s growth rate and further its economic development.

Keywords: foreign direct investment; FDI; China; regional economic growth; panel data; economic development; production function model; government policy; Chinese provinces.

DOI: 10.1504/WREMSD.2006.009073

World Review of Entrepreneurship, Management and Sustainable Development, 2006 Vol.2 No.1/2, pp.4 - 22

Published online: 23 Feb 2006 *

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