What are the determinants of producer services FDI in China? Aggregate and sub-sectoral data analyses

  • Runda Gao

    Student thesis: Doctoral ThesisDoctor of Philosophy


    This PhD thesis joins a vibrant conversation in a vastly under researched area pertaining to the determinants of producer services foreign direct investment (FDI). It begins by extensively revisiting the existing literature and discussing critically gaps from past study to then adopt a quantitative research method assisted by secondary data collected from various databases. The research question that this thesis addresses is: “What are the determinants of producer services FDI in China? Aggregate and sub-sectoral data analyses”. With this aim in mind, this thesis employs aggregate as well as provincial and sub-sectoral data obtained from the CEIC Data’s China Premium Database, National Bureau of Statistics of China, Provincial Statistical Yearbooks, Ministry of Commerce of China, Ministry of Transport of China, Ministry of Industry and Information Technology as well as a range of other relevant data drawn from national and provincial sources.

    China is exhibiting an enormous amount of economic and urban development accompanied by a transformation from its past manufacturing-focused economy towards one based on producer services. The conceptual framework developed for this research is guided by the identified research gap found in the literature on the determinants of FDI. The methodology employed is the Autoregressive Distributed Lag (ARDL) cointegration approach and panel data regression techniques to quantitatively investigate the determinants of Chinese producer services FDI at the aggregate and sector-disaggregated level.

    This research has revealed that there is a significant difference between the determinants of aggregate FDI and Producer Services FDI (PSFDI). The empirical evidence demonstrates that in contrast to the general influencing factors determining aggregate FDI (e.g., GDP, trade openness, low wages and environmental quality), high wages and research intensity are strikingly discovered to have a notable influence on determining PSFDI inflows to China. The evidence captured contends that following appropriate strategies and policies to specifically foster the attraction of PSFDI is of paramount importance for Chinese regulators.

    Collectively, the main novel findings of this research that make a significant contribution to knowledge rest with a broader understanding of the newly identified determinants of PSFDI inflows in China through a rigorous, evidence-based scientific process of inquiry. The thesis’ contribution adds to ongoing literature by accentuating that China’s aggregate FDI attraction differs from PSFDI’s attraction and that stimulating PSFDI inflows requires different policy measures. The pivotal implication for Chinese policymakers is to develop appropriate policies specifically targeted at attracting inward PSFDI and to implement sub-sector specific policies to encourage PSFDI in those sub-sectors most susceptible to attract PSFDI.
    Date of Award2022
    Original languageEnglish
    Awarding Institution
    • Coventry University
    SupervisorGlauco De Vita (Supervisor), Yun Luo (Supervisor) & Jason Begley (Supervisor)

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