Infrastructure and sectoral FDI in China: an empirical analysis
In this paper, for the first time, we investigate the relationship between infrastructure and sectoral distribution of FDI inflow in China. We use the Estimating Autoregressive Distributed Lag (ARDL) bound testing and Vector Error Correction Model (VECM) procedures of estimation. To unmask the short...
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| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
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UAB Sustainability for Regions
2021-06-01
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| Series: | Insights into Regional Development |
| Online Access: | https://jssidoi.org/ird/article/65 |
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| author | Faisal Mehmood Muhammad Atique Wang Bing Hameed Khan Henna Henna |
| author_facet | Faisal Mehmood Muhammad Atique Wang Bing Hameed Khan Henna Henna |
| author_sort | Faisal Mehmood |
| collection | DOAJ |
| description | In this paper, for the first time, we investigate the relationship between infrastructure and sectoral distribution of FDI inflow in China. We use the Estimating Autoregressive Distributed Lag (ARDL) bound testing and Vector Error Correction Model (VECM) procedures of estimation. To unmask the shortcomings in the previous literature, we use a composite index of infrastructure with more than 30 indicators. The results show that there is a long-run relationship between sectoral FDI and infrastructure. A bidirectional causal relationship is confirmed by using VECM. However, we find unidirectional causality between the primary sector's FDI and infrastructure, and it is running from infrastructure to primary sector FDI. The inclusion of control variables, e.g., institutional quality, trade openness, and domestic investment, is robust in our analysis. The positive role of infrastructure in the sectoral distribution of FDI inflows is of utmost importance for policymakers and Chinese-government. Several policy implications are given in our study. |
| format | Article |
| id | doaj-art-cc3a4f0b2f7946a69c0a8534570a99f5 |
| institution | OA Journals |
| issn | 2669-0195 |
| language | English |
| publishDate | 2021-06-01 |
| publisher | UAB Sustainability for Regions |
| record_format | Article |
| series | Insights into Regional Development |
| spelling | doaj-art-cc3a4f0b2f7946a69c0a8534570a99f52025-08-20T02:02:44ZengUAB Sustainability for RegionsInsights into Regional Development2669-01952021-06-013216017510.9770/IRD.2021.3.2(1)Infrastructure and sectoral FDI in China: an empirical analysisFaisal Mehmoodhttps://orcid.org/0000-0002-3948-7819Muhammad Atiquehttps://orcid.org/0000-0002-7157-8702Wang Binghttps://orcid.org/0000-0003-2322-5387Hameed Khanhttps://orcid.org/0000-0003-1775-0687Henna Hennahttps://orcid.org/0000-0003-3012-3047In this paper, for the first time, we investigate the relationship between infrastructure and sectoral distribution of FDI inflow in China. We use the Estimating Autoregressive Distributed Lag (ARDL) bound testing and Vector Error Correction Model (VECM) procedures of estimation. To unmask the shortcomings in the previous literature, we use a composite index of infrastructure with more than 30 indicators. The results show that there is a long-run relationship between sectoral FDI and infrastructure. A bidirectional causal relationship is confirmed by using VECM. However, we find unidirectional causality between the primary sector's FDI and infrastructure, and it is running from infrastructure to primary sector FDI. The inclusion of control variables, e.g., institutional quality, trade openness, and domestic investment, is robust in our analysis. The positive role of infrastructure in the sectoral distribution of FDI inflows is of utmost importance for policymakers and Chinese-government. Several policy implications are given in our study.https://jssidoi.org/ird/article/65 |
| spellingShingle | Faisal Mehmood Muhammad Atique Wang Bing Hameed Khan Henna Henna Infrastructure and sectoral FDI in China: an empirical analysis Insights into Regional Development |
| title | Infrastructure and sectoral FDI in China: an empirical analysis |
| title_full | Infrastructure and sectoral FDI in China: an empirical analysis |
| title_fullStr | Infrastructure and sectoral FDI in China: an empirical analysis |
| title_full_unstemmed | Infrastructure and sectoral FDI in China: an empirical analysis |
| title_short | Infrastructure and sectoral FDI in China: an empirical analysis |
| title_sort | infrastructure and sectoral fdi in china an empirical analysis |
| url | https://jssidoi.org/ird/article/65 |
| work_keys_str_mv | AT faisalmehmood infrastructureandsectoralfdiinchinaanempiricalanalysis AT muhammadatique infrastructureandsectoralfdiinchinaanempiricalanalysis AT wangbing infrastructureandsectoralfdiinchinaanempiricalanalysis AT hameedkhan infrastructureandsectoralfdiinchinaanempiricalanalysis AT hennahenna infrastructureandsectoralfdiinchinaanempiricalanalysis |