%0 Journal Article
%T Competing for Foreign Direct Investment:  The Case of Local Governments in China
%A Chen Wu
%A Gregory S. Burge
%J Public Finance Review
%@ 1552-7530
%D 2018
%R 10.1177/1091142117698015
%X This article explores the effects of locally adopted economic development zones and government spending promoting foreign affairs on foreign direct investment (FDI)¨Crelated employment in Chinese provinces. While these policies are motivated by a desire for employment growth, empirical evidence supporting their effectiveness has proven elusive. Using data from Chinese provinces covering 1999 to 2012, we explore this relationship using a dynamic system generalized method of moments approach. We find some evidence that trade zones enhance FDI-related employment but find none to support the idea that industrial development zones and spending to promote foreign affairs increase employment. Conversely, regional spillovers are consistently found to increase FDI-related employment in our main results and all robustness checks. We argue this highlights the importance of crowd-out effects and agglomeration spillovers, and that coordinating FDI promotion policy across regions may compare favorably to the current approach, which mainly encourages local competition over a largely fixed pool of aggregate FDI
%K FDI in China
%K crowd out
%K agglomeration spillovers
%K economic development zones
%U https://journals.sagepub.com/doi/full/10.1177/1091142117698015