Article: The impact of China's FDI surge on FDI in South-East Asia: panel data analysis for 1986-2001.(foreign direct investment )

China's surge in foreign direct investment inflows is raising concerns that it is taking such investment away from other South-East Asian economies. This article assesses whether this is the case, using fixed-effects estimation to test for the relationships between FDI in South-East Asian economies within a simple model of location determinants of foreign direct investment, assuming the supply of FDI to be elastic. The results suggest that China raised rather than diverted such investment into neighbouring economies during 1986-2001; the results obtain whether inflows are lagged or not. This may be because countries do not compete for foreign direct investment in market ...

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