The Role of Foreign Direct Investment on Income Convergence in <scp>C</scp>hina after Early 1990s from a Spatial Econometric Perspective

Ma, Ji; Jia, Hongyu

doi:10.1111/rode.12187

Cited by 10 publications

(8 citation statements)

References 29 publications

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“…Given the sample average value of FDI (0.013) and GINI variable (0.283), we can expect that a 10% increase in FDI to provincial GRP ratio brings about a 0.016 decrease in intra-provincial inequality (measured by GINI coefficient), ceteris paribus 11 . The result corroborates the findings of Gries and Redlin ( 42 ), and Ma and Jia ( 39 ). However, our finding differs from studies based on inter-provincial data [e.g., ( 35 , 37 )] and prefectural-level cities data ( 19 ) documenting that FDI increases inequality.…”

Section: Resultssupporting

confidence: 91%

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The Impacts of Globalization on Inequality in the Post-COVID-19 World: Evidence From China

Cheong

Wojewodzki

et al. 2021

Front. Public Health

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Empirical studies suggest that globalization (FDI and international trade) has been greatly affected by the COVID-19 and related anti-pandemic measures imposed by governments worldwide. This paper investigates the impact of globalization on intra-provincial income inequality in China and the data is based on the county level. The findings reveal that FDI is negatively associated with intra-provincial inequality, intra-provincial inequality increases as the primary industry sector (agriculture) declines. The result also finds that the increase in inequality stems not from the development in the tertiary or secondary industry sectors per se, but the unevenness in the distribution of these sectors.

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Section: Resultssupporting

confidence: 91%

“…Huang and Wei ( 19 ) and Zhang et al ( 20 ) find that FDI contributes to income inequality and the formation of convergence clubs across prefectural-level Chinese cities. On the contrary, Ma and Jia ( 39 ) document a positive association between FDI and regional income convergence.…”

Section: Literature Reviewmentioning

confidence: 94%

The Impacts of Globalization on Inequality in the Post-COVID-19 World: Evidence From China

Cheong

Wojewodzki

et al. 2021

Front. Public Health

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“…Lin et al (2011) introduced the panel cointegration model using province-level panel data from 1997 to 2006 to empirically explore the effect of FDI on Total Factor Productivity (TFP) across regions in China.Its empirical result found the spillover effects of FDI inflow may markedly result in economic growth and technological advancement in China for both short and long period within and cross regions. Ma and Jia (2015) stated that the effect of FDI on income inequality has been examined by the neoclassical model of convergence and the augmented model with FDI introduced using provincial panel data for three periods : 1978-2007, 1978-1990 and 1991-2007. They found that during 1978-1990, regional economic growth showed a convergence trend while during 1991-2007, its growth rate became divergence (Ma & Jia, 2015).…”

Section: Methodologies On Researching Fdi and Regional Economic Growthmentioning

confidence: 99%

The Impact of Foreign Direct Investment on Regional Economic Growth and Income Convergence a Panel Data Study in China

Zhu¹

2022

IBES

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Previous studies regarding the impact of FDI on regional economic growth and income convergence in China have mixed results and are far from being conclusive due to different datasets and methodologies used. This study thus used a panel data from China Statistical Yearbook covering all 31 Chinese regions to better understand the impact of FDI on regional economic growth and income convergence in China. For the period between 1999 and 2017, it found that neither FDI inflow nor labor has a statistically significant impact on the provincial economic growth. However, domestic investment in fixed assets does have a statistically significant impact on the provincial economic growth. Moreover, there is no absolute ? income convergence among regions. Nonetheless, there is a conditional ? income convergence (a moderate convergence speed of 7.49%) after controlling for all other growth factors: domestic investment in fixed assets, population growth rate, FDI inflow, export, and higher education enrollment.

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“…Recent studies have shown that FDI is one of the main driving forces for regional economic growth and income convergence (Choi, 2004;Ma & Jia, 2015). In terms of empirical research on China, Wei (2002) discussed the impact of FDI on regional economic growth of coastal and interior areas using time series and cross-section data from 1985 to 1999, and found that FDI inflow has made a great contribution to the vast majority of regional economic growth gap between these two areas.…”

Section: Fdi and Related Growth Factorsmentioning

confidence: 99%

The Impact of Foreign Direct Investment on Income Convergence in China - A Spatial Panel Data Analysis

Zhu

Chiedozi

et al. 2021

JEMS

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After taking into account the spatial dependence effects in the panel data consisting of all 31 provinces, direct-controlled municipalities, and autonomous regions in China between the years 1998 and 2017, it found significant spatial autocorrelation effects in both traditional absolute and conditional β income convergence models. At the national level, using the spatial econometric models (Spatial Error Model for absolute convergence and Spatial Durbin Model for conditional convergence), the analysis shows that in the past 19 years from 1999 to 2017, there is no absolute β income convergence. However, there is conditional β income convergence after controlling for all growth factors, while the positive effect of fixed asset investment on regional economic growth is significant, and the effect of population growth is significantly negative. The other growth factors such as FDI inflow, export, and higher education enrollment were surprisingly found no statistically significant effects on regional economic growth. From regional level (Spatial Durbin Model and Spatial Lag Model), there is no conditional β income convergence within each four economic regions. Nonetheless, the northeast region showed an income divergence trend, where only the fixed asset investment is positively significant. This study results imply that China should continue to improve fixed asset investment and control population growth to stimulate regional economic growth and income convergence.

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The Role of Foreign Direct Investment on Income Convergence in China after Early 1990s from a Spatial Econometric Perspective

Cited by 10 publications

References 29 publications

The Impacts of Globalization on Inequality in the Post-COVID-19 World: Evidence From China

The Impacts of Globalization on Inequality in the Post-COVID-19 World: Evidence From China

The Impact of Foreign Direct Investment on Regional Economic Growth and Income Convergence a Panel Data Study in China

The Impact of Foreign Direct Investment on Income Convergence in China - A Spatial Panel Data Analysis

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