Country characteristics and foreign direct investment in China: A panel data analysis

Xiaming Liu, Haiyan Song, Yingqi Wei, Peter Romilly

Research output: Journal article publicationJournal articleAcademic researchpeer-review

60 Citations (Scopus)


In this paper an error-components model is developed to analyze the economic, political and cultural determinants of both pledged and realized FDI in China which has recently become the second largest host country for FDI. The panel data cover the period 1983-1994 (1984-1994) and 22 (17) home countries/regions in the case of pledged (realized) FDI. The results indicate that bilateral trade, cultural differences, and relative real changes in market size, wage rates, and exchange rates are important determinants of pledged FDI, and that bilateral trade, relative changes in wage rates and exchange rates affect realized FDI.
Original languageEnglish
Pages (from-to)313-329
Number of pages17
JournalWeltwirtschaftliches Archiv
Issue number2
Publication statusPublished - 1 Dec 1997

ASJC Scopus subject areas

  • Business, Management and Accounting(all)

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