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This paper develops a self-enforcing contract model to show that better economic fundamentals can help when there is weak rule of law-but with order-to attract foreign direct investment, whereas lowering taxes does not necessarily help. Using a cross-region Chinese dataset, the analysis finds...
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This paper develops a self-enforcing contract model to show that better economic fundamentals can help when there is weak rule of law -- but with order -- to attract foreign direct investment, whereas lowering taxes does not necessarily help. Using a cross-region Chinese dataset, the analysis...
Persistent link: https://www.econbiz.de/10012975785
Weak institutions ought to deter foreign direction investment (FDI), and mass media stories highlight China …'s institutional deficiencies, yet China is now one of the world's largest FDI destinations. This incongruity characterizes China …'s paradoxical growth. Cross-country regressions show that China's FDI inflow is not exceptionally large, given the quality of its …
Persistent link: https://www.econbiz.de/10012465214
This paper develops a self-enforcing contract model to show that better economic fundamentals can help when there is weak rule of law -- but with order -- to attract foreign direct investment, whereas lowering taxes does not necessarily help. Using a cross-region Chinese dataset, the analysis...
Persistent link: https://www.econbiz.de/10012551285
China is now the world's largest destination of FDI, despite assessments highlighting its institutional deficiencies …. But this FDI inflow corresponds closely to predicted FDI flows into China from a model that predicts FDI inflow based on … discrepancy is that, if government quality is measured by constraints on executive power, China receives somewhat more FDI than …
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