Abstract
The article theoretically illustrates that the new urbanization quality is inversely related to FDI inflows, and elaborates that the capitals will flow to cities with lower new urbanization quality because manufacturers spend more capital on corporate social responsibility in cities with higher new urbanization quality and have lower marginal output of capital according to the McDougall model. Based on the panel data of 286 prefecture-level and above cities in China from 1999–2019, a qualitative and quantitative analysis is conducted on the relationship between new urbanization quality and foreign direct investment (FDI) location choice. The results show that (1) the new urbanization quality has a negative impact on FDI inflows; (2) the impact of new urbanization quality on FDI inflows differs among cities of different nature, with the negative impact of the Pearl River Delta city cluster being larger than that of the Yangtze River Delta city cluster and larger than that of the Beijing-Tianjin-Hebei city cluster; the negative impact of eastern cities being larger than that of central and western regions; the negative impact of sub-provincial cities being larger than that of cities above the provincial level; and the negative impact of non-coastal cities being larger than that of coastal cities. The article argues that the Chinese government should improve the construction of new urbanization quality, so as to drive the control effect on polluting FDI, encourage the introduction of technology-based FDI and restrict the inflow of polluting FDI, while strengthening the coordinated development of regions and improving the ability of attracting foreign investment in regions with relatively weak economic foundation, so as to mitigate the negative impact of new urbanization process on FDI inflow.
Published Version
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