Does "Good Government" Draw Foreign Capital? Explaining China's Exceptional Foreign Direct Investment Inflow

Fan, Joseph P. H. ; Morck, Randall ; Xu, Lixin Colin ; Yeung, Bernard

World Bank, Washington, DC

关键词: ACTIONS;    AGENCY PROBLEMS;    BENCHMARK;    BENCHMARKS;    BUREAUCRACY;   

DOI  :  10.1596/1813-9450-4206
RP-ID  :  WPS4206

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

China is now the world's largestdestination of foreign direct investment (FDI), despiteassessments highlighting its institutional deficiencies. Butthis FDI inflow corresponds closely to predicted FDI flowsinto China from a model that predicts FDI inflow based ongovernment quality indicators and controls and is estimatedacross a sample of other weak-institution countries. Theonly real discrepancy is that, if government quality ismeasured by constraints on executive power, China receivessomewhat more FDI than the model predicts. This mightreflect an underestimation of the strength of theseconstraints in China, a unique institutional setting for FDIoperations, FDI based on expected future institutionalimprovements, or a unique Chinese model of development. Theauthors conclude that Ockham's razor disfavors thelast. They also note that FDI may be elevated becauseChinese institutions protect foreign firms better thandomestic ones.