Assessing the Role of Inward Foreign Direct Investment in Chinese Economic Development, 1990-2007: Towards a Synthesis of Alternative Views

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Main author: Lo, Dic
Other authors: Hong, Fuhai
Li, Guicai
Format: Journal Article           
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id eprints-21911
recordtype eprints
institution SOAS, University of London
collection SOAS Research Online
language English
language_search English
description In the context of globalization, China has been widely regarded as the most successful country in the world in utilizing inward foreign direct investment (FDI) for economic development. The mainstream of the literature has produced a wide range of studies that are largely within the theoretical framework of neoclassical economics, and they tend to conclude that FDI has contributed significantly to Chinese economic development – through capital formation, export expansion, technology transfer, and the transformation of the economic structures and institutions. The objective of this paper is to assess the role of FDI in Chinese economic development with reference to the broader theoretical literature on FDI and late development, which encompasses structuralism and radical political economy along with neoclassical economics. From the perspectives of the broader literature, the analyses of the paper find that FDI in China has indeed promoted economic development in one respect (improving allocative efficiency), but has also had unfavourable effect in another respect (worsening productive efficiency), resulting in an overall impact that tends to be on the negative side. The mainstream story of China is thus judged to be partial, and the lessons to be drawn from the experience are arguably far more complex than have been hitherto perceived.
format Journal Article
author Lo, Dic
author_facet Lo, Dic
Hong, Fuhai
Li, Guicai
authorStr Lo, Dic
author_letter Lo, Dic
author2 Hong, Fuhai
Li, Guicai
author2Str Hong, Fuhai
Li, Guicai
title Assessing the Role of Inward Foreign Direct Investment in Chinese Economic Development, 1990-2007: Towards a Synthesis of Alternative Views
publisher Elsevier
publishDate 2016
url https://eprints.soas.ac.uk/21911/

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