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Published VersionCC BY V4.0, Open Access
Journal article
The Impact of Foreign Direct Investment on Industrialization in China: A Spatial Panel Analysis
Economies, Vol.13(2), pp.1-18
2025
Abstract
This study employs spatial econometric techniques to examine the heterogeneous effects of foreign direct investment (FDI) on industrialization across China’s four major regions—East, Central, West, and Northeast—using panel data from 31 provinces (1998–2016). Our findings reveal significant regional variations: FDI negatively impacts industrialization in the developed East, positively influences the less developed Northeast, and shows no significant effect in the Central and Western regions. To achieve balanced industrialization, policymakers should adopt spatially differentiated strategies. In the East, the focus should be on incentivizing high-value FDI in R&D and green technologies, while the Northeast could benefit from stronger economic partnerships within the Belt and Road Initiative (BRI). For the Central and Western regions, prioritizing infrastructure investments linked to the BRI and fostering cross-regional innovation corridors could attract labor-intensive FDI and promote technology diffusion, addressing regional disparities. The study’s robust spatial analysis offers valuable guidance for policymakers in crafting region-specific strategies to leverage FDI for balanced economic growth.
Details
- Title
- The Impact of Foreign Direct Investment on Industrialization in China: A Spatial Panel Analysis
- Authors
- Zhifeng Yang - Shanghai Lixin University of Accounting and FinanceSajid Anwar (Corresponding Author) - University of the Sunshine Coast, Queensland, School of Business and Creative IndustriesYuqi Yang - Shanghai University
- Publication details
- Economies, Vol.13(2), pp.1-18
- Publisher
- MDPI AG
- Date published
- 2025
- DOI
- 10.3390/economies13020042
- ISSN
- 2227-7099
- Copyright note
- © 2025 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/).
- Data Availability
- The data used in this study are available upon reasonable request.
- Organisation Unit
- School of Business and Creative Industries; Indigenous and Transcultural Research Centre
- Language
- English
- Record Identifier
- 991103724002621
- Output Type
- Journal article
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