Investment climate in China: province estimates

Abstract

This paper uses a large firm-level survey to assess differences in performance across regions. A panel data analysis is conducted to explain both productivity and profitability across firms in terms of firm and industry characteristics. Regional dummies are included to pick up additional location-specific impacts and the size of these dummies is used to rank provinces. Province performance is then examined in terms of geography, infrastructure, the policy environment and aspects of the investment climate with the conclusion that the latter plays a major part in explaining provincial differences in performance.

Place, space, and foreign direct investment into peripheral cities

“…In 2006 the World Bank published a report on government effectiveness, socialdevelopment and the investment climate across China's cities. The report surveyed 12,400 foreign and domestic businesses across 120 cities and is thus one of the few sources of comprehensive data on subnational differences in China (Weiss, 2008) 1 . This data is selfreported by firms and aggregated at the city level with mean values taken as representative of local conditions.…”

A Tale of Two Cities: The Political Economy of Local Investment Climate in Solo and Manado, Indonesia1

“…Chinese cities that have created good investment climates, in the sense of reducing bureaucracy and corruption and providing appropriate infrastructure and financial services, tend to produce more value from given capital and labour, pay higher wages and earn higher profits (see also Hallward-Driemeier, Wallsten and Xu 2006). Indeed Weiss (2008) has used firm-level panel data from China to control for geography and infrastructure and thereby rank the impact of provincial policy on firm productivity and profitability.…”