Trade and foreign direct investment in coastal and inland China: A dynamic panel analysis

摘要

This paper examines the dynamic impact effect of FDI on export and import in coastal and inland China based on dynamic panel data over the period 1992–2005. General method of moments (GMM) estimation is used to solve endogenous problem because the lagged dependent variable is one of independent variables. The results indicate the current period FDI has a positive impact on export in the coastal while a negative impact in the inland. But the lagged one period FDI has an obvious positive effect on export both in coastal and inland China. The situation of import is only obvious about the lagged one period FDI which has a negative effect on import in all regions. So there is creative effect on export and substitutive effect on import of FDI while there is a lagged period effect with region discrepancy.