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Mingming Jiang
''On the Performance of Foreign Direct Investment in China: 1981-2004''
( 2012, Vol. 32 No.4 )
This paper centers on the measurement of the time-varying efficiency of foreign direct investment (FDI) in China from 1981 to 2004. I modify the standard stochastic production frontier approach to isolate the estimate of the technical efficiency of FDI. The estimations show that the FDI technical efficiency exhibits a U-shaped time pattern, i.e., there is efficiency deterioration in the early stage of China's reform and a gradual efficiency improvement after the mid-1990s. However, this U-shaped time pattern disappears when technical change (changing frontier) is taken into account.
Keywords: Foreign Direct Investment; Technical Efficiency; Stochastic Frontier;
JEL: C2 - Single Equation Models; Single Variables: General
O5 - Economywide Country Studies: General
Manuscript Received : Aug 01 2012 Manuscript Accepted : Dec 06 2012

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