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Relationships between economic growth, foreign direct investment and trade: evidence from China

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Abstract:

This study investigates the causal links between trade, economic growth and inward foreign direct investment (FDI) in China at the aggregate level. The integration and cointegration properties of quarterly data are analysed. Long-run relationships between growth, exports, imports and FDI are identified in a cointegration framework, in which this paper finds bi-directional causality between economic growth, FDI and exports. Economic development, exports and FDI appear to be mutually reinforcing under the open-door policy.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840110100835

Publication date: July 20, 2002

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