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This article investigates the spatial determinants of foreign direct investment (FDI) at the provincial level in China. Pecuniary externalities and technological externalities are the two main reasons behind the concentration of FDI in China. This article examines the resulting imbalance in the regional distribution of FDI among China's 30 provinces, municipalities and autonomous regions. It takes a novel approach to further investigate the role of innovation efficiency. This is also an indicator of technological externality. Panel data sets from 1999 to 2007 reveal that in attracting FDI, the domestic regional markets and foreign markets have substitution effects with one another based on the samples representing the national, eastern and central provinces. This effect, however, is not found in the samples from the western provinces. (CIJ/GIGA)

AbstractThis paper empirically analyses the effect of trade competitiveness and complementarity on the trade development between China and the countries along the Belt and Road (B&R). The study first measures the trade competitiveness and the complementarity between China and the countries along the B&R by using the trade competitiveness coefficient (TCC) and the trade complementarity index (TCI). Then a spatial gravity model is constructed to analyse the effect of trade competitiveness and complementarity on trade development between China and the countries along the B&R. We use generalized method of moments (GMM) and spatial filtering technology to verify the robustness of the model. The results show that the GDP of China and the countries along the B&R, the land area of countries along the B&R, trade complementarity, common language, free trade agreements (FTA), and the B&R Initiative significantly promote the trade development between China and the countries along the B&R, whereas the geographical distance between countries and trade competitiveness significantly inhibit it. Finally, to promote the trade development between China and the countries along the B&R, the present paper puts forward suggestions including improving trade promotion policies between China and the countries along the B&R and vigorously expanding cooperation with complementary industries in the countries along the B&R to enhance trade dependence.