Promoting exports: the role of inward FDI in China

Zhang, Kevin Honglin; Song, Shunfeng

doi:10.1016/s1043-951x(01)00033-5

Cited by 211 publications

(150 citation statements)

References 13 publications

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“…There are studies on other countries and blocks of countries in this regard. For instance, Zhang and Song (2000), find support for the widely held belief that increased levels of FDI positively affect export performance for China. Using an augmented export demand model and a panel data set for 11 Organization for Economic Cooperation and Development (OECD) countries Pain and Wakelin (1998) find that inward FDI has a positive effect on export.…”

Section: Previous Studiesmentioning

confidence: 88%

Impact of Foreign Direct Investment on Trade of African Countries

Hailu¹

2010

IJEF

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It is not uncommon to see African countries struggling to address their foreign currency shortage. FDI is presumed to play a role in addressing this problem. With this in mind, the main objective of the study is to determine the relationship between FDI and trade balance (import and export) of African countries for the period 1980 to 2007. Due to data heterogeneity, non-continuity and because the Hausman test favours it over the Random Effect technique, the Least Square Dummy Variable (LSDV) regression method is used. The elasticities of both export and import are positive and significant with larger elasticities noted for exports relative to imports. This implies that Multi-National Enterprises (MNEs) in SSA are not just export-oriented but also import dependent. To save on the scarce foreign reserve, investment policy makers in those countries should direct MNEs towards those areas involving further export promotion, import substitution and local factor intensive investments.

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Section: Previous Studiesmentioning

confidence: 88%

Impact of Foreign Direct Investment on Trade of African Countries

Hailu¹

2010

IJEF

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“…Moreover FDI creates sources of jobs (Lipsey, Sjöholm, & Sun, 2013;Waldkirch, Nunnenkamp, & Bremont, 2009). Some other researchers inspect that FDI also has causal effect on exports and also on the transferring of technology and improvement of external part of market to enhance up gradation (Brooks, Roland-Holst, & Zhai, 2008;Vogiatzoglou & Nguyen, 2016;Zhang & Song, 2000).…”

Section: Review Of Literaturementioning

confidence: 99%

Does Foreign Direct Investment Lead to Economic Growth? Evidences from Asian Developing Countries

Ali¹,

Mingque²

2018

IJEF

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The study about the interrelationship between FDI and economic growth in the host country is one of the hottest discussions. Some of the studies have evidence and consider FDI as the growth driver and some others don't. This study attempted to scrutinize the causal association of FDI with GDP in Indonesia, India, Malaysia and Bangladesh for the years of 1990 to 2014. Cointegration test has been applied in this study which shows that there is a long-term interrelationship within FDI and economic growth and then applied the Granger causality (GC) test which is based on the VECM. The short run results show that there are no evidence of causality direction from FDI to GDP and vice versa, whereas the long run results show that there is a positive impact of FDI and other variables to the GDP but not significant, and from GDP and other variables to FDI there is a negative interrelationship but significant. The results show the ambiguous interrelationship between FDI and economic growth.

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“…A plethora of articles analyzing the drastic growth of China's exports have been published in academic journals, magazines and newspapers. According to these studies, fundamental factors determining the significant growth and worldwide expansion of China's exports include: (1) abundant labor endowment and corresponding comparative advantage in labor-intensive products (Adams, Gangnes and Shachmurove, 2006;Wang 2006); (2) the reforms of domestic institutions, such as the transition to an market oriented economy, the adoption of export-led growth strategy and unilateral trade liberalization (Hu and Khan, 1997;Lin, Cai and Li, 2003); (3) improved market access for China's exports through institutional arrangements, namely the WTO membership, bilateral and multilateral free trade agreements and the abolishment of multi-fiber arrangement (Branstetter and Lardy, 2006;Prasad, 2009); (4) the exchange rate regime adopted by the Chinese government and the undervalued currency (Naughton, 1996;Marquez and Schindler, 2007;Thorbecke and Smith, 2010); and (5) massive inflows of export oriented foreign direct investment (Zhang and Song, 2000;Whalley and Xin, 2010).…”

Section: Introductionmentioning

confidence: 99%

Global Value Chains and China's Exports to High-income Countries

Xing

2016

International Economic Journal

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This paper argues that global value chains (GVCs) have functioned as a vehicle for "Made in China" products to enter international markets, especially the markets of high income countries. It identifies three spillover effects to Chinese firms participating in GVCs: brands, distribution networks and lead firms' technology innovations. By participating in GVCs, Chinese firms are able to bundle low skilled labor services with advanced technologies and globally recognized brands, and then sell their low value added services to the consumers of international markets. The competitiveness of China's processing exports is largely determined by more than 50% of foreign contents embedded in the exports. Using the panel data of bilateral processing exports covering more than 100 China's trade partners, it shows there exists a significantly positive correlation between the share of processing exports and the income of trading partners, implying that processing trade is an effective means for "Made in China" products to enter high income countries. The cross-country heterogeneity of processing exports also indicates China captures relatively more value added in its exports to low income countries than to high income countries.

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Promoting exports: the role of inward FDI in China

Cited by 211 publications

References 13 publications

Impact of Foreign Direct Investment on Trade of African Countries

Impact of Foreign Direct Investment on Trade of African Countries

Does Foreign Direct Investment Lead to Economic Growth? Evidences from Asian Developing Countries

Global Value Chains and China's Exports to High-income Countries

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