The Introduction of FDI and Use of Land Resources for Local Government

Abstract:

The introduction of land finance and foreign direct investment (FDI) lead to competition among provincial local governments in the background of fiscal decentralization. This paper analyzes the provincial data from 1999 to 2008 by a spatial econometric model. The main contents include the relationship between FDI policies in different provinces and the path dependence between FDI selection and land grant. The results showed that the FDI policies are significantly influenced by the similar policies of the surrounding provinces: the policy formulation and implementation is a complementary strategy between the studied province and surrounding provinces in the current year, and an alternative strategy in a lag. Land grant price significantly influent the entry of real estate. There is an obvious path dependence when FDI choose investment region. In this paper, these issues are analyzed with the actual situation in China.

• Periodical: Advanced Materials Research (Volumes 271-273)
• Pages: 863-867
• DOI: https://doi.org/10.4028/www.scientific.net/AMR.271-273.863
• Online since: July 2011
• Authors: Li Jie Jia, Guo Jie Zhao
• Keywords: FDI, Path Dependence, Supply of Land

References

[1] Yang and H.H. Nie: Economic Research Journal Vol. 20 (2008), p.99.

[2] X. Cai, J. Mo and Z.J. Feng: Economic Geography Vol. 32 (2009), p.215.

[3] Y.P. Shi and L.A. Zhou : Economic Research Journal Vol. 19 (2007) , p.17.

[4] S.Z. Ke: Economic Research Journal Vol. 8(2009), p.85.

[5] M. Arellano, S. Bond: Review of Economic Studies Vol. 58(1991), p.277.

[6] M. Arellano and S. Bond: Journal of Econometrics Vol. 68 (1995), p.29.

[7] R. Blundell and S. Bond: Journal of Econometrics Vol. 87 (1998), p.115.

[8] H. Gorg and D. Greenaway: World Bank Research Observer Vol. 9 (2004), p.171.

[9] E. Borensztein, J. De Gregorio, J.W. Lee: Journal of International Economics Vol. 45(1998), p.115.