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More and more Chinese enterprises have participated in the Belt and Road initiative (BRI) since its launch in 2013. However, have they all actually benefited? Which companies otherwise have benefited most from the plan? To answer these questions, this paper analyzes the impact of the BRI on Chinese enterprises. Among several findings, it reveals that the performance of companies remained low even though the initiative policy initially stimulated performance, the performance of enterprises depends on the geographical location of enterprises and that the returns of China's outward foreign direct investment in various industries became more volatile with only the mining industry enjoying better returns. Thus, the paper shows that the BRI offers Chinese enterprises opportunities but also brings challenges for companies to optimize the allocation of their resources and improve the performance of their investments. [ABSTRACT FROM AUTHOR]

Using a simultaneous equations model, this paper investigates how/whether the presence of foreign direct investment (FDI) affects the performance of local firms in China's (1) leather shoe manufacturing and (2) textile and garment manufacturing industries. We use the value of sales (total revenue) as a measure of firm performance in domestic and export markets. The distinguishing feature of this paper is the use of an FDI presence measure that takes the regional dimension into account. The empirical analysis presented in this paper reveals that the presence of FDI leads to a significant positive impact on the domestic sales and export intensity of local firms in both industries. This result is found to be robust to alternative measures of FDI. Based on the result, it is recommended that, in order to maximize the benefits from inward FDI, Chinese policy-makers must encourage domestic and foreign-invested firms to locate in close geographical proximity. [ABSTRACT FROM PUBLISHER]

China's outward FDI reached a peak in 2016, making it as important a foreign investor as Germany, France and the United Kingdom. In this paper, we investigate the main motivations behind Chinese investments in developing countries, Central and Eastern Europe (CEE) in particular. Although the size of Chinese investment in CEE is small, the region is strategic for China as it is a gateway into Western Europe under the Belt Road Initiative. As new or future members of the EU, the CEE countries also provide access to the single market. We find that the motivations to invest in developing countries differ according to regions. Based on outward FDI data provided by the Chinese authorities, the number of Chinese FDI greenfield and M&A projects from Financial Times and Zephyr respectively, as well as face-to-face interviews with companies with investments in CEE, we find that for the case of CEE, domestic markets, access to the larger EU market, strategic assets like technology and prior relationship with the CEE are main reasons for investing. [ABSTRACT FROM AUTHOR]

Following economic reforms, China has become one of the premiere destinations for foreign capital; however, the benefits of this spectacular growth are not evenly distributed. Since the beginning of the 2000s, the Chinese government has designed and implemented policies to encourage foreign investment in central and western provinces to help decrease the significant distributional differences in regional industrial value-added, with limited success. In contrast to previous literature, this paper uses Panel Least Squares method to analyze empirically the impact of industrial sector FDI on Chinese regional inequality in industrial value-added 2003–2013, using three Chinese regions. The lack of prerequisite institutional structure to aid in FDI absorption affects location choices. Despite government policies to support inland regional economic development, foreign firms still prefer to invest in coastal provinces, further illustrating the effects of regional clusters. [ABSTRACT FROM AUTHOR]

This paper estimates the short and long-run impact of foreign direct investment, electricity consumption, and real GDP on ecological footprints in the context of environmental Kuznets and Pollution haven hypothesis for China, India, and Pakistan over 1970–2016. Panel and time series models have been adopted in this research. Results of the cointegration test revealed the long-run association among the considered variables. Furthermore, Fully-Modified and Dynamic Ordinary Least Square validated the pollution haven and environmental Kuznets hypothesis for the study area. On the other hand, the linkages between income and ecological footprints have identified U-shaped EKC in the case of China and India. The empirical results of the Dumitrescu and Hurlin panel causality test indicated a unidirectional causality from income to ecological footprints. In contrast, bidirectional causality found between ecological footprints and foreign direct investment and between ecological footprints and electricity consumption. [ABSTRACT FROM AUTHOR]

This paper aims to explore the foreign influences on Taiwan's economic transformation over the past 40 years. While exports have always been important in sustaining Taiwan's economic growth, the driving force behind exports has changed from inward investment to outward investment. The analysis carried out is from an international political economy perspective and takes a historical overview. It argues that the US, Japan and China pursued economic policies based on their own economic interests. These foreign governments' economic policies together with their entrepreneurs' business interests are the more important variables for shaping Taiwan's economic structure. During the 1960s, without the US's financial guarantees for American MNCs and security guarantees for the island, the KMT's foreign investment promotion policy would not have been as successful as it was when Taiwan faced a military threat from China. The US and Japanese economic policies changed, and since the 1970s competition between their businesses in the world market has integrated Taiwan into a regional production network. Subsequent to the Sino-US rapprochement, the US gradually opened up its market towards China. With America's rising trade barriers against Taiwanese-made products, Taiwanese entrepreneurs found profits by investing in China. Even though the Taiwanese Government tried hard to pull back the mounting outward investment in China, it was unable to achieve it. In contrast to the traditional point of view, this paper offers insights into the economic interaction between first the US and Japan and later between the US and China that resulted in Taiwan's economic transformation. [ABSTRACT FROM AUTHOR]

With the rapid increase in foreign capital inflow, a major concern for policy makers is whether such capital accumulation will help to alleviate a developing country's income inequality or make the rich richer and the poor poorer. This paper points out that more intensive competition in the labor market can be one of the reasons causing China's rising income inequality. This is because of, first, the increase in urban unemployment, especially from the state-owned enterprises, and, second, the rising nominal wage gap between the state- owned enterprises and firms with whole or partial foreign ownership. However, the overall productivity and hence the real wage can increase in both the private sector and the state sector. To reduce income inequality, the government should further enable the state sector to compete on an equal footing with the private sector. This includes both increasing labor mobility and removing the state sector's obligations to provide social welfare to its employees. Moreover, it is essential to build a social safety net to assist the losers in this labor market reform to ensure social stability as China opens both good and financial markets. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of foreign direct investment (FDI) on the foreign trade of China. It firstly presents a theoretical discussion of the impact of FDI on foreign trade from both macro- and microeconomic views, and then provides an empirical study of the role of foreign-invested enterprises in the foreign trade of China. In particular, this paper explores transfer pricing by multinational corporations (MNGs), probing their motivations and latitude to practice transfer pricing in the Chinese particular circumstances and examining empirical evidence. [ABSTRACT FROM AUTHOR]

This paper empirically investigates the impact of inward foreign direct investment (FDI) on total factor productivity (TFP) growth in a developing country, China. Utilising an endogenous growth theoretic framework, we estimate a model using 1328 firm-level data and spanning the period 2003–2008. We find that the productivity gap constrains the impact of FDI on TFP, while foreign equity participation enhances technological transfer from foreign partners thus resulting in increased TFP in the Chinese electronic industry (CEI). Our findings demonstrate the need for greater investment in the human capital skill base, adopting flexible labour regulatory policies and encouraging investment in R&D as it enhances TFP in the CEI. [ABSTRACT FROM PUBLISHER]

This paper uses provincial socioeconomic and environmental data and investigates whether there exists an intra-county pollution haven effect for China. We examine whether differences in the stringency of environmental regulations affect the choice of location for FDI in China. We use a five-year panel dataset for 30 provinces in China that includes three measures of environmental regulations, which vary across time and province, and a significant number of control variables including measures of agglomeration and factor abundance. We control for unobserved heterogeneity by using a feasible generalised least square estimator. Our results suggest that environmental stringency has a significant and negative effect on FDI, leading us to conclude that, ceteris paribus, FDI prefers to locate into regions with relatively weak environmental regulations. This provides some support for the existence of a pollution haven within China. [ABSTRACT FROM AUTHOR]

Since the inception of the open-door economic reform under Deng Xiaoping's initiative in 1978, the Chinese economy has in the past twenty years grown at an average annual rate of 9.4 per cent. China's path mirrors in many respects the experiences of Japan and South Korea in their rapid growth periods. A fundamental difference, however, is the fact that the rapid growth in China has been accompanied by increasing inflows of foreign direct investment (FDI). A striking feature of that FDI is the emphasis on technology transfer. This paper analyses the process of technology transfer in the context of learning by doing and summarizes its findings within a comparative developmental context. [ABSTRACT FROM AUTHOR]

This article explores the spatial heterogeneity and time-varying nature of FDI determinants. It also examines the impact of the Belt and Road Initiative (BRI) on regional FDI inflows. Applying both the long-term static model and the short-term dynamic model to a provincial-level dataset in China over the 1979–2018 period, we find that FDI is positively affected by market size, labour costs, openness, transport infrastructure, human capital, and the exchange rate, but negatively affected by population, and more importantly, these effects are heterogeneous across regions and over different time periods. We also find that provinces directly involved in the BRI became less attractive to foreign investors after the launch of the BRI in 2013. [ABSTRACT FROM AUTHOR]

This study empirically investigates the dynamics of motivations behind China's outward foreign direct investment (FDI). Based on a dataset of 75 host countries of China's outward FDI, we test the relative importance of outward FDI motives in different time periods. We account for endogeneity issues due to unobserved host country-specific factors and reverse causality using a dynamic panel estimation approach. We find that over time increasing foreign market commitment, exploiting global network linkages, and the seeking of external resources (natural resources and strategic assets) have become more important in driving outward FDI from China. [ABSTRACT FROM AUTHOR]

Studies on the impact of foreign direct investment (FDI) on the Chinese economy have essentially focused on the relationship between FDI, productivity and economic growth, revealing a tendency toward sectoral, regional and macroeconomic empirical studies. This work aims to complement these approaches and contribute to the rather limited literature on the relationship between FDI, Human Capital and Innovation at a corporate level. Based on a set of large and innovative firms (national and foreign capital) located in China, we have concluded that (1) the direct impact of foreign capital on the level of human capital in firms is negative, that is no evidence was found suggesting that FDI has a positive influence on their human capital and (ii) in indirect terms, by means of investment in R&D (research and development) activities, FDI has a positive impact on general human capital (i.e. formal education). These results suggest that for China to benefit from FDI, it is necessary to implement a selective policy to attract FDI, taking into account more technologically advanced, R&D-based projects. [ABSTRACT FROM AUTHOR]

This paper attempts to identify the motivations, objectives, selection criteria for locations and partners of foreign invested enterprises (FIEs) in China and to compare the differences among investors from different source countries, by using a survey of 106 FIEs in China. It is found that the main motivations are China's huge potential market size, low labor cost and preferential government fiscal treatments. The main determinants of geographical destination are the location of the Chinese partner, better preferential policy and familiarity with the Chinese partner. The main determinants for partner selection are mutual trust between the two parties, good credit of the Chinese partner and capability to deal with local authorities. It is also found that there are no significant differences in the long-term objectives between the two distinguished groups of foreign investors (Hong Kong, Macao and Taiwan versus other multinationals from the rest of the world), though the differences exist in their short-run objectives and selection criteria for partners. [ABSTRACT FROM AUTHOR]

This article examines the impacts of international trade, foreign direct investment (FDI) and industrial structure on international business cycle co-movements between China and its major trading partners. We investigate the principal transmission factors of business cycle co-movements and their contributions to China's economic growth in the context of economic globalization. Through studying the 27 major trading partners during 1990–2015, we find that, from China's perspective, the synchronization tendency was continuously growing before the 2008 financial crisis but slowed down or even reversed after the crisis. Bilateral trade intensity and FDI intensity contributed more to cyclical co-movement behaviors between China and its emerging market partners, but less to economic synchronization between China and its advanced economic partners. Industrial structure similarity, on the contrary, could explain the co-movement behaviors between China and its advanced economic partners, but not emerging market partners. China's past economic growth was also significantly correlated with the economic performance of its non-Asian trading partners, but not Asian neighbors. [ABSTRACT FROM AUTHOR]

This article investigates the impact of institutional difference and natural resource endowment in developing host countries on the location choice of Chinese OFDI. We found that institutional difference between China and host countries insignificantly affect the flow of Chinese OFDI, however, when observed on sectoral levels; Chinese investment is responsive to the institutional difference in non-fuel natural resource rich countries while institutional difference asserts insignificant influence on Chinese OFDI in fuel resource rich countries. This shows that institutions play a role in the location choice of Chinese OFDI but, it depends on the sector and institutional proximity. [ABSTRACT FROM AUTHOR]

Using data from 1995 to 2017, this article shows that China plays a positive role in mitigating poverty and inequality in Africa. Namely, imports from China, especially imports of machinery and equipment but not manufactured goods, alleviate substantially poverty in the region. In addition, China's foreign direct investment (FDI) and China's engagement in infrastructure projects in the continent help not only eradicate poverty, but also narrow income inequality. However, total exports or exports of raw materials and fuels to China are irrelevant to income distribution. We also compare these impacts with the impacts of economic links with the United States (US) and find insignificant effects of the US's imports and FDI on income distribution but some positive effects of exports to the US on poverty in Africa. Our findings are robust when both the fractional nature of poverty and inequality indices and their correlation are taken into account. [ABSTRACT FROM AUTHOR]

This study uses city level panel data covering China's 262 cities for the period 2004–2012 and employs the dynamic panel system generalized method of moments (GMM) model with the instrumental variables regression technique to investigate empirically the impact of foreign direct investment on urbanization in China. The study finds that foreign direct investment on average has played a significantly positive role in the development of China's urbanization. However, the impact of foreign direct investment on urbanization varies from region to region. Foreign direct investment has a positive impact on urbanization in the coastal region but has no significant impact on urbanization in the inland region. Apart from foreign direct investment, the study suggests that the economic structure, the level of economic development, the level of fixed assets investment and the size of a city's population are important determinants of urbanization in China. [ABSTRACT FROM PUBLISHER]

We construct a new database of spatial relations between industrial firms and development zones using the Application Programming Interface addressing and document the development zones' spillover effect on firms' total factor productivity (TFP). Development zones significantly improve the TFP of surrounding firms, which attenuates with the distance from a development zone, and increases with the density of development zones in a given area. The spillover effect of national development zones decays more sharply than that of provincial ones. The rectification project improves films' TFP and the spillover effect of development zones. The establishment of development zones affects surrounding firms' TFP, where TFP of newly entered firms decreases in the short term but soon rises rapidly. [ABSTRACT FROM AUTHOR]

We investigate empirically whether the presence of foreign enterprises in downstream industries has increased intra-provincial backward linkages in China, and what characteristics of foreign direct investment (FDI) contribute to the generation of backward linkages. We conclude that FDI in downstream industries generally has failed to induce higher backward linkages except for the electronic and telecommunications equipment industry. Across industries, those characteristics of FDI, such as the labour productivity gap between indigenous and foreign companies, whether FDI is from Hong Kong/Macau/Taiwan or other countries and whether FDI is wholly owned or jointly owned, appear less influential on the backward linkages than the activities of foreign enterprises (e.g. value-added activities and import and export activities). [ABSTRACT FROM AUTHOR]