THE RELATIONSHIP OF OPENNESS AND INVESTMENT BASED ON CHINA'S PROVINCIAL PANEL DATA

Abstract

This thesis investigates whether openness determines investment in each region of China over the period of 2002 to 2017. In particular, the investment is decomposed into the foreign direct investment and the domestic investment. Using the panel data analysis, the results show that openness has no impact on all types of investment except the positive impact on FDI in the east of China. This implies that more policies should be implemented in the western region to be more foreigner-friendly in order to attract more FDI.