This research seeks to identify the political determinants that account for the uneven geographical distribution of foreign direct investment (FDI) across Chinese counties. I compare the political determinants of Taiwanese FDI (TDI) and non-Taiwanese FDI site selection across counties in China. I focus on the central-local politics in China, especially the effect of county government autonomy on FDI and TDI site selection. I investigate whether the effect of county government autonomy and its interaction with TDI agglomeration varies across the three economic regions of China (i.e. eastern, central, and western regions). I argue that county government autonomy is critical to attracting inflows of FDI, and its impact is conditional on the existing level of FDI in a given county. Counties with higher autonomy are able to make greater commitments to and involvement in the market economy, have more flexibility to give preferential treatment to FDI and to improve the local investment environment. With the political burden that Taiwanese investors face from the special military and political relationship across the Strait, I argue that TDI is more sensitive to county government autonomy not only for the economic gains like other foreign investors but also for pursuing local protection against the political uncertainties from Beijing and the social instabilities of the local population. I also argue that county government autonomy’s impact on TDI inflow is strongest in the central region due to the less dominating role of the geographic and cultural advantages enjoyed by the eastern region and its better economic, cultural, political and geographic conditions that are lacking in the western region. Using the System General Method of Moment model to analyze the county level FDI/TDI panel data sets, I find autonomy’s impact on future FDI inflows fades with the increases in the existing level of FDI but gets stronger with the increases in the existing level of TDI inflows. I also find county government autonomy’s impact is strongest for the central region when the existing TDI inflows are zero or at the national average level.
| Identifer | oai:union.ndltd.org:unt.edu/info:ark/67531/metadc149633 |
| Date | 08 1900 |
| Creators | Lu, Kelan |
| Contributors | Mason, T. David, Breuning, Marijke, Ishiyama, John, Matsubayashi, Tetsuya |
| Publisher | University of North Texas |
| Source Sets | University of North Texas |
| Language | English |
| Detected Language | English |
| Type | Thesis or Dissertation |
| Format | Text |
| Rights | Public, Lu, Kelan, Copyright, Copyright is held by the author, unless otherwise noted. All rights Reserved. |
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