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Monday, June 18, 2018
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The effect of FDI on industry value-added: Evidence from China
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The effect of FDI on industry value-added: Evidence from China

22 pages · 3.64 EUR
(September 2016)

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Since the 1990s, trade in intermediate goods and raw materials between Multi- National Companies (MNCs), their subsidiaries, and international subcontractors increased sharply and currently dominates world trade. In 2013, trade in the Global Value Chain (GVC) accounted for 80 percent of global trade. The revolution in Information and Communication Technology (ICT) due to innovative technology and decreasing trade costs encouraged MNCs to fragment production and outsource various stages to countries with lower factor costs.

Opening subsidiaries in host countries via Foreign Direct Investment (FDI) is one method of outsourcing production stages and the amount of FDI has increased significantly in the past three decades, surpassing international trade in goods and services since the 1990s. According to UNCTAD (2013), the nominal stock of inward FDI tripled from 1980 to 2012. The patterns of international trade are clearly dependent on government interventions and FDI is no different. In addition, FDI has possible direct and indirect positive impacts on manufacturing value-added via technology spillovers and the creation of new employment opportunities. While various factors increase the positive effects of MNCs on the host country, the government policy of host countries is therefore one of the most important factors for directing FDI into constructive directions.

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the authors
PhD Behzad Azarhoushang
Behzad Azarhoushang

Behzad Azarhoushang absolviert sein PhD in Political Science an der Uni Kassel sowie an der Hochschule für Wirtschaft und Recht (HWR) Berlin. In seiner Doktorarbeit untersucht er die Auswirkung von Ausländischen Direktinvestitionen auf industrielle Entwicklung und regionale Ungleichheit in China. Er hält einen Masterabschluss in Chinese European Economics und Business Studies (CEEBS) von der HWR Berlin.

Prof. Dr. Jenifer Pédussel-Wu
Jenifer Pédussel-Wu

Nach dem Studium am Oberlin College wurde sie 2001 an der University of California, Irvine zur Ph.D. promoviert. Von 2001 bis 2005 war sie Senior Fellow am Zentrum für Europäische Integrationsforschung (ZEI) in Bonn. Sie hat am LEN Research Center der Universität Nantes und am OCRE–EDC in Paris geforscht und lehrte an der American University in Paris, an der Ecole des Dirigeants et Créateurs d’Entreprises (EDC) in Paris, an der Universität Bonn, UC Irvine und an der Landwirtschaftlichen Universität in Taigu, Shanxi (China). Derzeit ist sie Professorin für Volkswirtschaftslehre, insbesondere Welthandel und internationale Produktion, an der Hochschule für Wirtschaft und Recht Berlin.