The Role of Foreign Direct Investment on Income Convergence in China after Early 1990s from a Spatial Econometric Perspective

This paper introduces foreign direct investment ( FDI ) as an endogenous variable based on a neoclassical model of economic growth and investigates the impact of FDI on income convergence in C hina using provincial panel data from 1991 to 2007. A spatial model is later exploited to further examine the effect of FDI on convergence in C hina in light of remarkable and positive spatial correlations among neighboring regions. Results of estimates...