Explaining the lack of FDI in western China: an industrial perspective

YANG Xianming (杨先明), YUAN Fan (袁帆) and LIU Yan (刘岩)
School of Development Studies, Yunnan University

Abstract:
It is difficult to attract FDI into western China. This situation might not be explained by traditional geographical factors, because the gap of inward FDI between the western and the eastern regions of China has increased. This paper attempts to explain the situation from an industrial perspective by exploring the industrial differences in the two regions and analyzing their effects in terms of industrial development level, industrial structure and industrial linking capability. The results reveal that industrial factors are important barriers to the inflow of FDI to western China.
Key words:
FDI; Location choice; Level of industrial sophistication; Industrial structure; Industrial linking capability

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