Hard or Soft? Institutional Reforms and Infrastructure Spending as Determinants of Foreign Direct Investment in China
Preprint
- 26 June 2006
- preprint
- Published by Elsevier in SSRN Electronic Journal
Abstract
In this paper, we examine whether hard infrastructure in the form of more highways and railroads or soft infrastructure in the form of more transparent institutions and deeper reforms lead to more foreign direct investment (FDI). We use data of FDI from the United States, Japan, Hong Kong, Taiwan and Korea to various regions of China from 1990 to 2002. We control for the standard determinants of FDI - regional market sizes, wage rates, human capital and tax policies. Then we add indices of hard and soft infrastructures. We found that empirically soft infrastructure consistently outperforms hard infrastructure as a determinant of FDI.Keywords
All Related Versions
This publication has 31 references indexed in Scilit:
- Does China have an Impact on Foreign Direct Investment to Latin America?SSRN Electronic Journal, 2005
- Japanese direct investment in ChinaChina Economic Review, 2003
- Determinants of U.S. and Japanese Direct Investment in ChinaJournal of Comparative Economics, 2002
- Foreign Direct Investment In China: Effects On Growth And Economic PerformanceSSRN Electronic Journal, 2002
- Centripetal forces in China's Economic Take-OffIMF Working Papers, 2000
- Inter-City Competition for Foreign Investment: Static and Dynamic Effects of China's Incentive AreasJournal of Urban Economics, 1996
- WHAT ATTRACTS FOREIGN MULTINATIONAL CORPORATIONS? EVIDENCE FROM BRANCH PLANT LOCATION IN THE UNITED STATESJournal of Regional Science, 1992
- State Characteristics and the Location of Foreign Direct Investment within the United StatesThe Review of Economics and Statistics, 1991
- Information, Incentives and Bargaining in the Japanese EconomyPublished by Cambridge University Press (CUP) ,1988
- The locational determinants of direct investments among industrialized countriesEuropean Economic Review, 1988