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As the second-largest and a fast-growing economy, China has played important roles in promoting globalization and impacting the environment. They explore the effect of China's Central Inspection of Environmental Protection (CIEP), a campaign-style governance approach, on China's legislation process related to the conservation of nature. The second paper by Chen et al. (2021) empirically examines how European Union-China (EU-China) trade affects intra-EU trade. [Extracted from the article]

This paper tests the significance of FDI as a way to alleviate credit constraints. Incoming foreign investment provides additional sources of capital. Specifically in the Chinese case, enterprises may look for foreign investors, being constrained in their activity due to distortions in the state-dominated system. First, the Chinese financial system allocates resources to the least efficient firms – state-owned enterprises – while denying the same resources to Chinese private enterprises, forcing them to look for a foreign investor. Second, the inefficient system of state investment planning leads to mismanagement of public enterprises, increasing ‘insolvency-induced FDI’. We propose to analyse determinants of FDI in Chinese provinces to test the above hypotheses. We control for traditional determinants of FDI such as market access, labour costs, productivity, infrastructure, reform advances and banking sector size in order to assess the impact of inter-provincial heterogeneity in terms of the access that private enterprises have to credit and the distortive management in state-owned firms. [ABSTRACT FROM AUTHOR]

Whether regional integration can promote the urban agglomeration to attract foreign direct investment and expand the opening‐up is a question worthy of in‐depth discussion. This paper constructs a quasi‐natural experiment from the perspective of regional integration expansion in the Yangtze River Delta, using the panel data of 208 cities in China from 2005 to 2017. The main purposes are to examine and analyze the common trends and regional differences regarding the influences of regional integration on FDI in entire cities, incumbent cities, and new cities. Next, the internal mechanisms of expansion on FDI are explored. The results show that the regional integration exerted a significant positive effect on the FDI of the entire Yangtze River Delta. For different regions, the effect of regional integration on FDI in the incumbent cities was higher than that in the new cities. In terms of mechanisms, regional integration could affect FDI through industrial division mechanism and market unification mechanism, yet the role of economic connection mechanism exhibited regional differences. The conclusions of this paper bear important enlightenment for promoting the construction of regional integration in China and the high‐quality growth of FDI in the Yangtze River Delta. [ABSTRACT FROM AUTHOR]

This paper analyses what factors best explain foreign capital inflows into Hungary and China during the period 1978–92. The size of the host country markets is found to play a positive role, while the cost of capital variables and political instability are negatively correlated with investment inflows. It supports the hypothesis that low-cost labour and currency depreciation are important factors in explaining how much foreign capital inflows into a particular country. There is little evidence to support classical hypotheses concerning tariff barriers and imports variables. The OECD growth rates show significant positive correlation with foreign direct investment in Hungary. © 1997 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

As there are many studies on the predictors of corporate social responsibility (CSR) reporting, the influences of foreign direct investments (FDIs) knowledge spillovers (KSs) on CSR reporting in developing countries remain unclear. This paper introduces the passive‐learning KSs concept to explain whether, why, and how domestic firms learn CSR knowledge from their foreign counterparts. First, we investigate the relationship between foreign ownership and the quality of CSR reporting (CSRQ). Second, we test the moderating effect of three types of direct institutional pressures: the green development policy, the mandatory CSR reporting requirement, and CSR regulations issued by the State‐owned Assets Supervision and Administration Commission. Third, we examine the moderating effect of board interlocks to explore the indirect impacts of institutional pressures. We run regressions on a sample of Chinese A‐share listed companies and the hypotheses are generally supported. This paper contributes to the literature on CSR reporting and FDIs KSs by adopting the passive‐learning KSs theory to explain CSR KSs in developing countries. [ABSTRACT FROM AUTHOR]

Copyright of Canadian Journal of Economics is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

An economic growth target is a declaration by policy authorities of commitment to that target and the corresponding allocation of resources. The constraints created by economic growth target are an important economic management method in China, which has helped China's economy to achieve remarkable achievements. However, it has also brought about serious environmental problems, threatening China's sustainable development. Using the data about economic growth targets in the work reports of 30 Chinese provincial governments from 2006 to 2017, this paper constructs several spatial measurement methods, such as the spatial Durbin model, to examine the constraints created by economic growth target's impacts on air pollution. The main conclusions are as follows. First, a significant "U‐shaped" relationship exists between the constraints created by economic growth targets and air pollution. Second, the spatial Durbin model analysis revealed that PM2.5 across China's provinces display significant positive spatial spillover effects and spatial agglomeration characteristics. Third, the direct, indirect, and total effects of constraints created by economic growth targets on air pollution are all statistically significant and depict a "U shape." Finally, the constraints created by economic growth targets have an apparent threshold effect on air pollution, and the inhibiting effects increase with human capital and industrial restructuring. However, with the increase in foreign direct investments, constraints created by economic growth targets may increase air pollution. The conclusions of this paper are of great significance for improving the management of local government economic growth targets and sustainable development. [ABSTRACT FROM AUTHOR]

Does outward foreign direct investment (OFDI) help stabilize employment in the home country? This paper studies the relationship between the volatility of employment growth and the OFDI of a firm using matched data of Chinese firms from 2000 to 2019. The empirical analysis shows that employment in OFDI firms is less volatile than that in non‐OFDI firms. For firms in the eastern coastal areas of China, OFDI has a more obvious effect in restraining employment volatility. OFDI is also conducive to reducing employment volatility for firms that conduct OFDI in Asian, European, and American countries. Firms in the service sector conducting OFDI see a greater reduction in employment volatility. In addition, OFDI affects employment volatility mainly through the channels of technological innovation and production transfers. This study recommends that the government enact reforms in the domestic market to encourage more firms in China to invest. [ABSTRACT FROM AUTHOR]

This paper examines the impact of green finance and carbon emission performance, as well as the mechanisms, using data from 30 Chinese provinces for the time frame of 2008–2018. The findings show that (1) the level of green finance development significantly enhances carbon emission performance, where industrial structure, foreign direct investment, and population density are all important control variables affecting carbon emission performance. (2) Energy consumption structure, green industry, and green patented technology are all mediating variables for the level of green finance development to enhance carbon emission performance. Meanwhile, the effects of green finance development on carbon emission performance are nonlinear under varying economic growth, industrial structure, and urbanization levels. (3) After addressing the spatial autocorrelation of carbon emission performance, the level of green finance development still significantly enhances carbon emission performance. (4) The level of green finance development in China's eastern provinces, pilot provinces of carbon emission trading, and provinces with abundant coal resources can more significantly enhance carbon emission performance. On this basis, this paper makes specific suggestions for green finance to enhance carbon emission performance. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between labor quality and inward foreign direct investment (FDI) distribution in China using a large sample of Chinese cross-sectional, firm-level data, with comprehensive information about labor quality. The paper finds that labor quality measured by education level plays an important role in deciding the distribution of inward FDI, but labor quality measured by working certificates loses its significance using non-parametric matching techniques and the instrumental variables and generalized method of moments technique. The author also finds that labor quality has a more significant impact on other foreign investments than Hong Kong-invested, Macau-invested and Taiwan-invested firms. The impacts of labor quality on inward FDI are found to be strongly uneven across industries and provinces. Therefore, China should pay more attention to the education of employees in all foreign-invested firms, and invest more in education to improve labor quality, which will help China to attract more FDI, especially technology-intensive FDI. [ABSTRACT FROM AUTHOR]

Regional trade policy uncertainty is an important factor affecting enterprises' outward foreign direct investment (OFDI). This paper uses the China−ASEAN Free Trade Area as the research object. The research uses the "China Industrial Firm Database" from 2001 to 2013 and the "List of Chinese Overseas Investment Enterprises (Institutions)" to match micro‐enterprise data. Using the difference‐in‐difference (DID) approach to construct quasi‐natural experiments, we study the impact of the reduction in regional trade policy uncertainty on Chinese enterprises' OFID. The results show that the free trade agreement strategy implemented by China has reduced the regional trade policy uncertainty, which has had a significant positive impact on Chinese enterprises' OFDI. The establishment of the China−ASEAN Free Trade Area has significantly increased Chinese enterprises' OFID in ASEAN countries. The study further finds that enterprises of different ownership types, in different regions and of different factor intensities display heterogeneous effects in this process. The empirical results of the paper provide new ideas for promoting OFDI from the standpoint of reducing regional trade policy uncertainty, and also provide a new perspective for explaining the increase in foreign investment in China in recent years. [ABSTRACT FROM AUTHOR]

Building a green and healthy economic system and achieving high‐quality economic growth have long been the development goals pursued by the Chinese government. Under the local government competition system, coordinating the relationship between economic growth and ecological sustainability is a decisive factor for China's high‐quality development. As a former state planned economy, China inherited a legacy of setting economic growth targets at various levels of government. This paper analyzes the relationship between economic growth targets and ecological efficiency by using panel data models and spatial econometric techniques. Moreover, the mediating effect model and dynamic threshold effect model are used to study their influence mechanism and the possible nonlinear relationship. The results indicate that there is an inverted U‐shaped relationship between economic growth targets and ecological efficiency. Optimizing industrial structure and R&D investment can improve regional ecological efficiency. The economic growth targets in neighboring regions have a "U"‐shaped relationship with local ecological efficiency. The mechanism test results suggest that economic growth targets affect ecological efficiency by influencing financial development, foreign direct investment, infrastructure investment, environmental regulation, and technological innovation. The impact of economic growth targets on ecological efficiency shows a significant threshold effect when economic growth targets, industrial structure, R&D levels, financial development, foreign direct investment, infrastructure investment, and environmental regulation are at different threshold values. Therefore, to promote regional healthy competition and ecological efficiency, the government should formulate scientific and reasonable economic growth goals and improve the official evaluation system. [ABSTRACT FROM AUTHOR]

Differences between the business environment in the home country and the host country are an important factor when enterprises consider their location choice with regard to outward foreign direct investment (OFDI). However, this is ignored by much existing literature. Based on the trade‐off framework of international firms between exporting and participation in OFDI under the condition of heterogeneous enterprises, this paper constructs a theoretical model of the impact of distance of doing business (DDB) on OFDI. We take China's OFDI as an example and use the World Bank Group's Ease of Doing Business Index to construct the DDB indicator, as well as test the impact of the DDB on China's OFDI by combining the macro‐location panel data of China's OFDI between 2004 and 2017. The results showed that increasing DDB significantly reduces the scale of China's OFDI. The effect is robust. The mechanism is that DDB significantly decreases the success rate of OFDI and increases the cost of OFDI, thereby decreasing the scale of OFDI. Further analysis then finds that official acts, such as building partnerships, and folk acts, such as increasing cultural identity, can significantly reduce the negative effect of DDB on OFDI. [ABSTRACT FROM AUTHOR]

This paper investigates whether environmental regulations affect inward foreign direct investment (FDI). The identification strategy uses the reduction target policy for air pollutants during eleventh Five‐Year Plan period implemented by the Chinese government in 2006. Our difference‐in‐difference‐in‐differences estimation employs three‐dimension of variations; prefecture (i.e., high target prefectures vs. low target prefectures), industry (more polluting industries relative to less polluting ones), and year (i.e., before and after 2005). We find that tougher environmental regulations lead to less inward FDI through increasing the probability of exit and reducing the probability of entry of foreign invested enterprises. Mechanism analysis shows that foreign invested enterprises with relatively low productivity demonstrate strong negative response. This allocation of resource improves industry productivity. [ABSTRACT FROM AUTHOR]

This paper studies the impact of foreign direct investment (FDI) on regional innovation, which is measured by patent applications and patent citations, based on city‐level data in China from 1995 to 2015. Using an instrumental variable approach, this paper demonstrates that FDI not only promotes the quantity of regional innovation, but also improves the quality of regional innovation in China. The findings are robust to various specifications of the empirical model and measurements. In addition, we highlight the channel of improving local absorptive capacity and market competition through which FDI exerts positive influence on regional innovation, and show that FDI acts as a substitute for local financial development to raise regional innovation. [ABSTRACT FROM AUTHOR]

Digital transformation has given firms new development capability. This paper portrays the overall digital transformation intensity of China's listed firms in 2007–20, and empirically examines the impact of digital transformation on outward foreign direct investment (OFDI) and its transmission mechanisms for the first time. It is found that digital transformation significantly enhances OFDI with two transmission mechanisms: (1) reduced transaction costs and (2) improved production and operation efficiency [Correction added on 25 Aug 2023, after first online publication: The number of transmission mechanisms have been corrected from 'three' to 'two' in this version.] The impact is more pronounced in the host countries whose economies are more digitalized, in private enterprises, and in the service industries than in their respective counterparts. [ABSTRACT FROM AUTHOR]

This paper studies the impacts of geographic proximity and investment connection on the outward foreign direct investment (OFDI) decisions by Chinese multinational firms, including both greenfield investment and cross‐border merger and acquisition. We model firms' OFDI expansion with the lagged spatial structure, and collect outward FDI data of 3479 Chinese multinational firms from 2002 to 2013 whose investment destination covers more than 160 countries. We find that the spatial expansion of firms' existing OFDI play an important role in shaping their future investment decisions. Firstly, firms tends to invest in destinations that are closer to China, and expand further into destinations that are geographically closer to their existing OFDI locations. This is the geographic network effect. Secondly, we also find that firms are more likely to invest in countries with more intense FDI from China, and extend their OFDI networks to destinations with stronger investment connections with their existing subsidiary locations. This is the investment network effect. We show that these two effects are robust to alternative investment and geographic network measures and further controls. [ABSTRACT FROM AUTHOR]

Eco‐efficiency is an important indicator which serves as a helpful instrument for the studies of sustainable development. This paper estimated the eco‐efficiency of 26 cities in China's Yangtze River Delta urban agglomerations. Based on different matrixes, Moran's I was applied to analyze the spatial correlation. The spatial Durbin model was applied to analyze the direct and indirect effect of influencing factors. Some conclusions were drawn. (a) The average eco‐efficiency showed an increasing trend. The regional difference of eco‐efficiency decreased and then increased. Shanghai's eco‐efficiency had been the highest. (b) The eco‐efficiency showed positive spatial autocorrelation and it also exhibited significant characteristic of local spatial autocorrelation. (c) Economic development, fixed assets investment, and technological level of one city had a significant positive impact on the eco‐efficiency of the city itself. Industrial structure, fiscal decentralization, and foreign direct investment of a city had a significant negative impact on the eco‐efficiency of the city itself. Changes in the economic development and technological levels in a city had positive impacts on the eco‐efficiency of its neighboring cities. Foreign direct investment had a negative spatial spillover effect. (d) This paper suggested that it is necessary to pay attention to the interaction of influencing factors among cities. [ABSTRACT FROM AUTHOR]

China established several Pilot Free Trade Zones (PFTZs) in recent years as a major step to deepen trade liberalisation. In this paper, we investigate the impact of free trade zones (FTZs) on the economy's capital flow, imports and exports, as well as the underlying mechanisms. We consider the newly established FTZs as a natural experiment and construct a difference‐in‐difference (DID) model with the staggered establishment dates of the FTZs. Our results show that FTZs promote local foreign direct investment (FDI) and outward foreign direct investment (OFDI), but their influence on goods exports and imports remains limited. [ABSTRACT FROM AUTHOR]

As the world's largest CO2 emitter, China's emission reduction is the key to mitigating global climate change. Global investment capital, as a significant influencing factor of emissions, greatly contributes to China's economic growth and stimulates frequent interprovincial trade since the reform and opening. However, the spatial correlation of foreign investment and CO2 emissions across Chinese provinces is rarely considered. This paper explores the role of foreign direct investment (FDI) in emission reduction in China during 2004–2015 using the spatial Durbin economic models with two‐way fixed effects. Then, the partial differential equations decomposition of the local and spatial spillover effects is conducted for capturing the marginal effects of influencing factors. Results show that FDI contributes to emission reduction for the whole country, whereas interprovincial transmission and intra‐provincial transmission show significant heterogeneity. Specifically, FDI increases emissions in host areas, while FDI provides positive environmental externalities to adjacent areas through spatial spillovers. Our findings provide a new perspective to explain the coexistence of the "Pollution Haven" and "Pollution Halo" theories in a country. Also, the exploration of spatial spillover effects of FDI on emissions can provide a reference for other countries with rising trade and investment flows to promote collaborative emission reduction. Key Points: Local effects of foreign direct investment on emissions are positive, while spatial spillover effects are negativeThe coexistence of the "Pollution Haven" and "Pollution Halo" theories in a country is examinedResults help promote collaborative emission reduction across regions with trade [ABSTRACT FROM AUTHOR]

Foreign enterprises in China have long enjoyed 'super‐national treatment'. This paper aims to explore the role of tax benefits in observed transitioning from domestic into foreign enterprise. Using firm‐level data, we find that the preferential tax policies enjoyed by foreign firms increase the probability of transitioning from domestic to foreign firms. To examine the effects of imported foreign direct investment (FDI), we separate introduced FDI into 'genuine' and 'fake' types according to the share of the host firm's registered capital, and it is seen that only 'genuine' FDI can improve the targeted firm's productivity and financial situation. [ABSTRACT FROM AUTHOR]

A considerable number of German multinational enterprises (MNE) are located in the Greater Shanghai Area. German MNE in the industrial sector show an inclination to export German forms of technical training—more specifically German‐style dual apprenticeship training—to their worldwide subsidiaries. Within China, this is especially the case for the Greater Shanghai Area, which has established itself as a 'hotspot' for dual apprenticeship training in the last 15 years. This paper explores what makes the Greater Shanghai Area such a 'hotspot' for dual apprenticeship training—in international comparison—by focusing on factors influencing the spatial agglomeration of dual apprenticeship training activities in this region. The paper finds unevenly distributed institutional resources regarding the attraction of German Foreign Direct Investment as well as unevenly distributed resources at the skill formation system level as important influencing factors. Both factors show 'self‐reinforcing' dynamics strengthening already existing spatial agglomeration of dual apprenticeship training activities. [ABSTRACT FROM AUTHOR]

This research proposes a new theory called bilateral rent‐seeking to explain the dramatic growth of foreign direct investment (FDI) inflow into China over the past several decades. We construct a Nash bargaining model to illustrate the relevance of how the reciprocal relationship between the local state and foreign investors leads to the greater incentives for the latter to invest in the local market, thus resulting into the huge FDI inflows into the domestic market in China in the past several decades. The empirically evidence presented in the end is broadly consistent with the theories proposed in this paper [ABSTRACT FROM AUTHOR]

This paper supplements studies on the economic consequences of judicial independence from the perspective of cash flow. It explores the rotation of local judges as an exogenous shock that increases local judicial independence in China and analyses the impact of rotation on provincial cash inflow using data from China's high‐value payment system. The difference‐in‐difference estimates indicate that the rotation of the judges can attract more outside cash inflow, including amount and average size. This effect persists even after controlling for the endogeneity concern and the effect of disaster. The results of the dynamic effects show that the impact of the rotation of the judges on cash inflow mostly originates in the second and third years after the rotation. We further find that judicial independence can promote more foreign direct investment, venture capital's investment, and bank loans and clarify the impacting mechanisms of judicial independence on cash inflow. [ABSTRACT FROM AUTHOR]

This paper investigates the changing sources of growth in post-reform China. Using cross-province regressions, this paper finds that, in earlier periods, exports, foreign direct investment and marketization were significantly related to per capita income growth, whereas since the late 1990s, foreign direct investment and marketization have lost their significance and have been replaced by new sources of growth, such as innovation and knowledge, with only exports continuing to be important. This finding is robust after controlling for other variables representing other economic policies and provincial characteristics. We also tackle the possible endogeneity of innovation variables using the instrumental variables estimation method. [ABSTRACT FROM AUTHOR]

Summary: This paper studies two novel productivity characteristics of foreign acquisition on high‐tech manufacturing firms: the dynamic and the non‐Hicks‐neutral effects. A dynamic productivity effect of foreign ownership arises when adoption of foreign technology and management practices takes time to fully realize. Furthermore, these dynamic adjustments may be capital or labor augmenting as adoption of advanced production technologies tends to have non‐neutral productivity implications in developed countries. We propose and implement an econometric framework to estimate both effects using firm‐level data from China's manufacturing sector. Our framework extends a nonparametric productivity framework, in which identification is achieved using a firm's first‐order conditions and timing assumptions. We find strong evidence of dynamic and non‐neutral effects from foreign ownership, with significant differences across investment sources. Investment from OECD sources is found to provide a long‐term productivity boost for all but the largest recipients, while that from Hong Kong, Macau, and Taiwan does not raise performance. These findings have implications for China's declining labor share and for the rising domestic value‐added content of its high‐tech exports. [ABSTRACT FROM AUTHOR]

This paper applies a difference‐in‐differences framework to explore the economic consequences of the recent U.S.–China trade war. The average abnormal returns of Chinese listed firms during a period centered on President Trump's announcement on 22 March 2018 are taken as a proxy for the firms' exposure to the potential trade war. Firms more negatively exposed are found, surprisingly, to report higher total revenues in the post‐announcement period. The results indicate that the Chinese firms tend to reallocate their business from overseas to the domestic market. Such within‐firm reallocation is found to be more pronounced among private firms, exporting firms and non‐FDI firms. Besides, firms with higher negative exposure increase total investment and financing but decrease foreign investment after the trade war. [ABSTRACT FROM AUTHOR]

This paper estimates the impact of environmental regulation on foreign investment using the 2003 Pollution Discharge Fee Reform in China as a quasi‐natural experiment. Using a Difference‐in‐Differences method to investigate foreign investment from 2000 to 2007, we propose the "Pollution Deterrence Hypothesis" and the "Green Strategy Hypothesis" and provide evidence for the debate between these two hypotheses. We find that foreign investors' strategic responses to enhanced environmental regulations depend on their initial shareholder status in a firm. More specifically, after increased environmental regulation, foreign investors are less likely to invest in pollution‐intensive firms in which they have held relatively small shares. However, foreign investors are more inclined to increase their shares in pollution‐intensive firms in similar situations if they already held a relatively large number of shares. Based on the heterogeneous analysis, we suggest that our results are most apparent in regions with better local governance. [ABSTRACT FROM AUTHOR]

The impacts of services, especially the producer services, on pollution have received little attention so far. In this paper, we propose the hypotheses that producer service foreign direct investment (PS FDI) would have direct impact on pollution, in a way that is similar to manufacturing activities. We test our hypotheses using Chinese provincial data from 2008 to 2018. Our findings show that PS FDI does affect pollution in a significant way, and the results remain robust under various tests. We also identify significant mediating effect, whereby PS FDI not only directly affects pollution levels, but also indirectly does so via its impacts on manufacturing activities. Besides localised effect, we show that PS FDI exhibits spatial spillover effect by influencing pollution levels in neighbouring provinces. Finally, we find that manufacturing activities magnify the impact of PS FDI on pollution locally, but mitigate its spatial spillover effect. [ABSTRACT FROM AUTHOR]

The unipolar international order led by the USA has given way to a multipolar order with the emergence of China as a great power competitor. According to many commentators, the deterioration of Sino–US relations in recent years heralds a "new Cold War." The new Cold War differs from its namesake in many respects, and in this paper we focus on its novel territorial logic. Containing the USSR was the overriding objective of American foreign policy for nearly four decades, but in contrast, the USA and China are engaged in geopolitical‐economic competition to integrate territory into value chains anchored by their domestic lead firms through the financing and construction of transnational infrastructure (e.g., transportation networks and regional energy grids). We show this competition poses risks as well as opportunities for small states to articulate and realise spatial objectives. We present cases from Nepal and Laos that demonstrate that by hedging between China and the USA and its partners, their governments are able to pursue spatial objectives. In order to achieve them, however, they must implement significant reforms or state restructuring. The result is the emergence of what we term the 21st‐century infrastructure state, which seeks to mobilise foreign capital for infrastructure projects designed to enhance transnational connectivity. The "rise" of China has precipitated a multipolar international order and, according to some commentators, heightened US–China tension heralds a "new" Cold War. In this context, small states hedge between the USA and its partners and China, as they pursue longstanding state spatial objectives. This necessitates state restructuring, which in some cases leads to the emergence of the 21st‐century infrastructure state. [ABSTRACT FROM AUTHOR]

This paper examines the eco‐innovation effects of foreign direct investment (FDI) by its economic agents, multinational enterprises (MNEs), in the context of emerging economies. It particularly focuses on environmental regulations and industrial pollution intensity as the key moderating mechanisms. We develop hypotheses by combining economic rationality of natural‐resource‐based view and institutional rationality of institution‐based view. Our theoretical discussions highlight the importance of the intersection between the two theories in explaining the eco‐innovation effects of foreign ownership and FDI spillovers, and in particular in allowing a nuanced consideration around the under‐explored boundary conditions of FDI effects in the eco‐innovation domain. Using the propensity score matching method to match domestically owned enterprises (DOEs) with foreign MNE‐invested enterprises (FIEs) in China during the period of 2001–2013, we find clear evidence that FIEs outperform their domestic counterparts of similar characteristics in conducting eco‐innovation. This superior performance is particularly pronounced in cities with higher levels of environmental regulation and industries with higher levels of pollution. Furthermore, we assess the local impact of MNEs on eco‐innovation of DOEs and find evidence that the presence of FDI, in particular, that within cities, leads to increased eco‐innovation in DOEs. FIEs' eco‐innovation spillover effects within a city are conditional on environmental regulation and pollution intensity. Thus, in China, MNEs are found to act as agents of change who not only conduct eco‐innovation in the host country but also stimulate the eco‐innovation of DOEs. [ABSTRACT FROM AUTHOR]

This paper reviews the major changes in China's trade policies in the last few years. During this period, the adjustment of trade policies has developed in the following ways: first, the establishment of free trade zones, which emphasises the importance of advanced systems rather than preferential policies; second, putting forward the "Belt & Road" Initiative, which indicates China's new stage of development from "bringing in" to "going out"; third, holding import expos, which marks an era when China's foreign trade development has shifted from focusing on exports only to focusing on both exports and imports; fourth, reducing entry barriers of foreign capital, which demonstrates that the policy framework for FDI has gradually changed from a positive list to a negative list; fifth, promoting trade negotiations, which reflects that China has actively participated in bilateral, regional and multilateral trade talks; and finally, building up new experimental fields of reform and opening up, which shows evidence that a new generation of special economic zones is emerging. [ABSTRACT FROM AUTHOR]

This paper applies a real option game approach to examine the impact of market competition on the timing of foreign direct investment under exchange rate uncertainty both theoretically and empirically. Theoretically, we establish that a more competitive foreign market deters a market‐seeking firm from entering the market earlier if it faces exchange rate uncertainty. By contrast, a more competitive home market might induce a cost‐oriented firm to shift its production to a low‐wage foreign country earlier. A recent survey data set of Taiwanese firm investment into China is employed to assess the validity of our theoretical framework. With event history modeling, our empirical results are generally consistent with our theoretical prediction. [ABSTRACT FROM AUTHOR]

Using a sample of 124 countries assisted by China from 2000 to 2019, this paper examines the impact of foreign aid on outward foreign direct investment (OFDI) and the mitigation mechanism of risk. The research finds that, first, foreign aid can significantly reduce the country risk of recipient countries, especially political risk and financial risk, and thus play a role in promoting the inflow of OFDI of donor countries, and there is a lagged effect of this role; Second, foreign aid from other countries has a negative impact on China's OFDI to recipient countries, indicating that foreign aid is nonaltruistic and exclusive; Third, the mitigation effect of foreign aid on country risk is achieved through five channels: compensation effect, synergistic effect, pioneer effect, assimilation effect, and redistribution effects. [ABSTRACT FROM AUTHOR]

This paper examines the changing spatial distribution of electronic information manufacturing (EIM) industry in China by focusing on the location choice of new firms. A three‐pronged "global‐regional‐local" nexus framework was proposed to identify the factors that influence firm location choice. Tobit regression analysis was performed to evaluate the impacts of these factors. The study reveals the spatial concentration of the EIM industry and a trend of westward diffusion. The regression analyses stratified by time period and by region demonstrate spatial and temporal variabilities in the influence of many factors, especially the regional advantage factors (e.g., labor cost, localization economies, and urbanization economies). Meanwhile, some factors, such as foreign direct investment, the presence of state‐owned enterprises, and local government policies, show stable effects over time and across regions. [ABSTRACT FROM AUTHOR]

In the past two decades, China has become a strategic economic partner for both Latin American and African nations. China's economic global relevance is translating via its "Belt and Road Initiative (BRI)" into massive amounts of foreign trade, Foreign Direct Investment (FDI), loans, and aid for both regions. Recently, China has added a national security and defense dimension to its BRI relationship with both regions. China's global strategic economic, geopolitical, and global defense goals are being expressed in its global "Road and Belt" power initiatives and strategies. This paper explores an additional dimension of China's BRI initiative: its role in both regions' defense industries and national security environments. China is increasingly using its trade and investment leverage with both regions to unbalance their defense choices and strategic defense relationships. China's increasing interactions with African and Latin American countries poses a number of geopolitical implications for both the United States and Western European countries. [ABSTRACT FROM AUTHOR]

Copyright of Regional Science Policy & Practice is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

ABSTRACT This paper aims to provide empirical evidence on the extent and possible channels of tax competition among provincial governments in China. Using a panel of provincial-level data for 1993-2007, we find strong evidence of strategic tax interaction among provincial governments. Tax policy is approximated by average effective tax rates on foreign investment, taking into account the tax incentives available to foreign investors. In line with the predictions of the theoretical tax competition literature, we also highlight the impact of each province's characteristics (including its size and level of industrialization) on the strategic interaction with its neighbors. Finally, the paper explicitly identifies the establishment of development zones as an important conduit for tax competition among provinces. [ABSTRACT FROM AUTHOR]

Abstract: This paper explores the relationship between globalization and inter‐industry wage differentials in China by using a two‐stage estimation approach. Taking advantage of a rich household survey dataset, this paper estimates the wage premium for each industry in the first stage conditional on individual worker and firm characteristics. Alternative measures of globalization are considered in the second stage: trade openness and capital openness. A disaggregation of trade into trade in final and intermediate goods shows that increases in import (export) shares of final goods reduce (increase) the wage premia significantly, whereas imports or exports of intermediate goods do not explain differences in industry wage premia. This finding is supported by stronger effects for final goods trade in coastal than noncoastal regions. Our results also show a positive relationship between capital openness and industrial wage premia, though this finding is less robust when potential endogeneity issues are allowed for. [ABSTRACT FROM AUTHOR]

This paper studies FDI spatial spillovers in China. Empirical investigation reveals that, along the spatial dimension, FDI presence tends to generate negative intraregional spillovers that dominate other potential positive externalities. The direction, magnitude and scope of inter-regional spillovers vary, depending on the spillover channels. Our empirical findings call for a rethinking of policy-driven agglomeration among indigenous firms and MNEs in developing countries. [ABSTRACT FROM AUTHOR]

This paper examines the horizontal and vertical export spillovers of foreign direct investment ( FDI) on China's manufacturing domestic firms by using firm-level census data over the period of 2000-03. Based on a Heckman two-step procedure combining first differencing and instrumental variable regression techniques, it is found that FDI has had a positive impact on the export value of domestic firms mainly through backward technology spillovers and a positive impact on the export-to-sales ratio of domestic firms through horizontal export-related information spillovers. After decomposing FDI by different market orientation and domestic firms by different ownership, the paper finds that the positive impact on domestic firms' export values is mainly from the nonexporting and the exporting foreign-invested enterprises while the positive impact on domestic firms' export-to-sales ratios is mainly from the high-exporting foreign-invested enterprises. Both types of export spillovers are mainly diffused to domestic non-state-owned enterprises. [ABSTRACT FROM AUTHOR]

Foreign direct investment (FDI) plays an important role in the socio‐economic advancement of developing countries. In the last decade, FDI inflows from China into Côte dʼIvoire have grown rapidly. Using quarterly time series data from 2003Q1 to 2017Q4, this study probes if China FDI has any significant welfare impact on the citizens of Côte dʼIvoire vis‐à‐vis if a causal relationship exists. The policy outcome is to stimulate further discourse that will reduce poverty and enhance the living standard of the population. The study uses vector autoregressive (VAR) and the Toda and Yamamoto (1995) modification of the non‐Granger causality test to determine if a causal relationship exists and the direction of causality. The empirical analysis provides evidence of a unidirectional causality from China FDI to social welfare (proxied by the human development index [HDI]) but no indication of causality between China FDI to economic welfare (proxied by real gross domestic product per capita [GDPPC]). This study, which is borne out of empirical curiosity, fills a lacuna in the FDI literature. To the best of our knowledge, this paper is a novel contribution that examines the FDI‐welfare nexus between China and a developing economy like Côte dʼIvoire. Thus, policies that will further stimulate FDI inflows from China must be carefully crafted to attract funding to the most productive sectors of the economy in order to improve both social and economic welfare. By extension, the policies may be adapted by developing economies with similar characteristics to Côte dʼIvoire. [ABSTRACT FROM AUTHOR]

Green innovation is an effective path to decrease environmental pollutions. It is of immense interest to evaluate the roles of green innovation on SO2 emissions reduction. We also investigate the static and dynamic threshold effect of human capital in the impacting paths of different innovations on SO2 emissions. The empirical results show that the design patent increases SO2 emissions while the development of utility patent can decrease SO2 emissions based on the static analysis and dynamic analysis. Both the "pollution halo" and the "pollution heaven" hypotheses of foreign direct investment (FDI) are validated in China. Moreover, green innovation positively affects SO2 emission reduction based on the System Generalized Method of Moment (SYS‐GMM) estimation. Both static and dynamic panel threshold regression results reveal that the positive effects of different innovations will become larger when human capital exceeds the corresponding threshold values. Hence, it is important to enhance green human capital. [ABSTRACT FROM AUTHOR]

This paper provides an investigation of the relationship between FDI and regional inequality during the stage of Chinese new regional development strategy. This prefectural level analysis is different from most other studies conducted at the provincial level. A spatial panel data approach is taken to examine the role of FDI in regional convergence at the national level and the economic region level, which is defined according to China's regional development programme. This study explicitly considers the spatial correlation issue in testing the role of FDI through spatial panel data models. The results suggest previous findings on the general relationships between FDI and economic development at the national level are too general. Although, the positive and significant effect of FDI on regional economic growth is confirmed at national level, the regional level analysis concludes that FDI does not have a consistent effect across different regions after controlling for other economic and social factors. The paper thus suggests that FDI related preferential policies toward the inland regions under the new development strategy will need to be tailored to region-specific characteristics if they are to be successful. Resumen. Este artículo investiga la relación entre la Inversión Extranjera Directa (IED) y la desigualdad regional durante la etapa de la nueva estrategia de desarrollo regional en China. Este análisis a nivel de prefecturas es distinto a la mayoría los estudios realizados a nivel provincial. Se empleó un enfoque de datos de panel espaciales para examinar el papel de la IED en la convergencia regional a nivel nacional y a nivel de regiones económicas, definidas de acuerdo con el programa de desarrollo regional de China. Este estudio tiene en cuenta explícitamente el problema de la correlación espacial al evaluar el papel de la IED a través de modelos de datos de panel espaciales. Los resultados sugieren que los hallazgos previos sobre las relaciones en general entre la IED y el desarrollo económico a nivel nacional son demasiado generales. Aunque se confirma el efecto positivo y significativo a nivel nacional de la IED sobre el crecimiento económico regional, el análisis por regiones lleva a concluir que el efecto de la IED no es uniforme para las diferentes regiones, después de controlar otros factores económicos y sociales. El artículo sugiere por tanto que las políticas relacionadas con la IED que bajo la nueva estrategia de desarrollo muestran preferencia por las regiones del interior, y que para que puedan tener éxito tendrán que ser adaptadas a medida de las características específicas de cada región. [ABSTRACT FROM AUTHOR]

In this paper, we examine the impact of foreign direct investment (FDI) on local urban inequality in China. Specifically, we consider the FDI policy change as an exogenous shock on the local labour markets. We find that cities that have experienced a bigger policy change in promoting FDI between 1997 and 2002 are significantly more unequal in 2005. This pattern is mainly driven by the positive association between FDI liberalisation and skill premia. The result holds after we control for other policy changes, such as privatisation of state‐owned enterprises, infrastructure and trade liberalisation. We then turn to investigate the mechanisms using firm and individual‐level information. Our firm‐level evidence shows that FDI firms not only hire relatively more high‐skilled workers but also provide relatively higher wages to high‐skilled workers compared to domestic firms. Moreover, the individual‐level analysis shows that FDI has a significantly positive spillover effect on wages received by skilled workers employed by state‐owned enterprises, but not wages of unskilled workers. [ABSTRACT FROM AUTHOR]

Based on extensive interviews in China and in Africa over 2 years, the present paper investigates Chinese private direct investment in Africa. Drawing on the Swedish Uppsala model, we explore two mian issues. First, do Chinese private enterprises follow the linear mode to invest in Africa? Second, if not, how do they go out and develop their investments, and who helps them overcome the obstacles to investing in Africa? We find that very few Chinese private enterprises follow a linear internationalization process, and most depend on the local overseas Chinese network and other networks to facilitate their entry into the host market. The reason lies in that Chinese private enterprises are still at the early stage of internationalization. Entrepreneurship is one of the most important ownership advantages of Chinese private enterprises investing in Africa. [ABSTRACT FROM AUTHOR]

This paper discusses two methods of measuring net foreign assets(NFA): directly using the financial account and indirectly using the current account. The former method is found to be more accurate than the latter method. The paper also includes a detailed discussion of the valuation methodology. The results show that China's NFA are much lower than the cumulative current account surplus or the cumulative foreign exchange reserves. This leads to an underestimation of growth in foreign direct investment and an overestimation of the capacity of foreign exchange reserves to cope with possible withdrawals. Therefore, the Chinese Government should pay more attention to valuation issues to obtain more accurate measurement of NF A. Meanwhile, the Chinese monetary authority should relax its control on the foreign exchange settlement system, allow the private sector to hold a certain amount of foreign exchange, and encourage foreign assets to be denominated in RMB to solve structural problems, including entity and currency mismatch. [ABSTRACT FROM AUTHOR]

Economic theory posits numerous channels through which FDI might create positive spillovers for domestic firms. However, the results of empirical studies that have sought to document these spillovers have been mixed. One explanation for this variation is that the capacity of domestic firms to absorb spillovers might vary. In the present paper, we explore these issues in the case of China. Aside from being one of the world's leading hosts of foreign direct investment, China makes for an interesting case study because its provinces vary greatly with respect to those factors most commonly held to influence absorptive capacity, such as the initial level of technology in domestic firms. This paper begins by empirically establishing that the spillovers from foreign direct investment do indeed vary across provinces. Threshold values for various factors that influence absorptive capacity factors are then estimated and it is found that conditions in many provinces presently fall short of these values. This provides an obvious focus of attention for China's policy-makers. [ABSTRACT FROM AUTHOR]

This paper empirically tests the existence of contagion using data on China's five parallel markets with different entry barriers for foreign capital. Taking the 1997 stock market crash as our experiment and using data on A, B and H shares, red chips and American depository receipts, the present paper tests whether these China-backed market returns respond differently to foreign shocks during the pre-1997 and post-1997 crash period. Evidence suggests that the contagion effects are stronger in markets with fewer entry barriers. An important implication of our findings is that countries vulnerable to contagion could be justified to impose some limits on capital flows. [ABSTRACT FROM AUTHOR]