Open door policy and China's rapid growth : evidence from provincial statistics
Jiang, Dong Hui
Jin, Zhao Hong
Date of Issue1995
College of Business (Nanyang Business School)
This Paper analyzes the relationship between "Open Door Policy" and economic performance of Chinese provinces. Two data sets are tested to investigate the short-term and long-term effects of foreign direct investments (FDI) and exports on a province's economic growth. It is found that during 1978-1992 FDI is the dominant factor to explain cross-province different growth rates. In comparison, the role of FDI in short-term is merely as an infusion of additional capital. However, in long-term, the spillover of technological and managerial knowledge through FDI is eventually dominant and contributes much than the capital itself. Finally, the higher growth rate of coastal provinces can be attributed mainly to their ability to attract more FDI.
DRNTU::Social sciences::Economic development::China
NANYANG TECHNOLOGICAL UNIVERSITY