Factors Determining Foreign Direct Investment in China

Abstract

The study investigates the factors determining FDI (Foreign Direct Investment) in China. The independent variables are Exchange rate, Export of goods and services, gross domestic product, Infrastructure, wage rate. The FDI (Foreign Direct Investment) is taken as the dependent variable in this study/research. The secondary data is collected from the World Development Indicator (WDI) covering the 21 years period (1990 to 2010). To analyze the data the regression model is used for data analysis. The software SPSS (Statistical Package for Social Sciences) is used to calculate and analyze the results. The present study shows that there is statistically significance in overall model. At this stage, it is concluded that Exchange rate, Export of goods and services, gross domestic product, Infrastructure have positive impact on Foreign Direct Investment (FDI) growth of the country and  wage rate have negative impact on Foreign Direct Investment (FDI).

Keywords: Foreign Direct Investment , Exchange rate, Export of goods and services, gross domestic product, Infrastructure, wage rate