Foreign Direct Investment Under Weak Rule of Law: Theory and Evidence from China

Xiaozu Wang (First Author), Tian Zhu (Participant Author), Lixin Colin Xu (Participant Author)

科研成果: 期刊稿件期刊论文

摘要

We have developed a self-enforcing contract model to show that better economic fundamentals can help an area or a region under a weak rule of law – but with order – to attract foreign direct investments (FDIs), whereas lowering taxes does not necessarily help. Using a cross-region Chinese dataset, we find evidence consistent with our theoretical analysis. Regional variations in tax rates and the perceived quality of formal contracting institutions are not correlated with regional FDI inflows, but leadership characteristics are. Most conventional economic factors have the predicted effects on FDIs. The finding that FDI is lower in locations where domestic private firms have better access to finance and where the air quality is poor is also new to the literature.
源语言英语
页(从-至)401-424
期刊Economics of Transition
20
3
DOI
出版状态已出版 - 2011

成果物的来源

  • ABDC-A
  • Scopus
  • SSCI

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