Fiscal policy and foreign direct investment in China

• 来源期刊: 中国财政与经济研究（英文版）
• 关键词: tax burden public input inflow of FDI panel regression
• 年，卷（期）: 2014,（1）
• 页码范围: 40-53
• 页数: 14页
• 语种: 英文

摘要

Using sub-national panel data for China,this paper discusses many policy factors attracting FDI.Therefore,it focuses on the comparison of public policy and other charactefistcs of provincial governments.Using a panel data set of 29 provinces in China for the period after reform and opening,we apply a panel regression model with fixed effects.We find that the tax burden has a significant effect on the location of FDI.In contrast with other research findings,this paper argues that local wages don't have a positive effect on the location of FDI.Then,this paper discusses the effects of disaggregated public expenditure on the inflow of FDI.Ultimately,we find that the quality of Chinese governance does not have a significant effect on FDI.