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The Role of FDI, Exports and Spillover Effects in the Regional Development of China

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  • Q. Zhang
  • B. Felmingham
Abstract
The objective of this analysis is to assess the impacts of export expansion, inward FDI, domestic investment and labour on the growth of China's Eastern, Central and Western regions using panel data over the period 1984 to 1998. A major contribution of the study is its tests for the presence of interregional spillover effects. The study indicates that both inward FDI and domestic investment stimulate growth in all three regions and for the PRC as a whole and that export expansion stimulates the growth of the PRC, Eastern and Central China, but not the West. Labour enhances the growth of the more traditional Western region, but not the more capital intensive Eastern seaboard or the PRC in its entirety. Finally, output growth spills over from the East to Western and Central China and from the Central area to Western China. These results are fully explained in the text.

Suggested Citation

  • Q. Zhang & B. Felmingham, 2002. "The Role of FDI, Exports and Spillover Effects in the Regional Development of China," Journal of Development Studies, Taylor & Francis Journals, vol. 38(4), pages 157-178.
    • Handle: RePEc:taf:jdevst:v:38:y:2002:i:4:p:157-178
    DOI: 10.1080/00220380412331322451
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