Understanding Foreign Direct Investment Inflows to China: The Governance Dimension

Abstract

Governance and Foreign Investment in China, India, and Taiwan: Credibility, Flexibility, and International Business. By Yu Zheng. Ann Arbor, University of Michigan Press, 2014. 266 pp., $65.00 hardcover (ISBN-13: 978-0-472-11904-2). Foreign Direct Investment (FDI) is one of those subjects that has garnered much interest from various disciplines including economics, international business, and political science. At the risk of generalizing, much recent research in both the economics and international business disciplines has converged on issues relating to the impact of FDI (productivity spillovers, employment, and the like), as well as the growing importance of outward FDI from developing countries, especially China and India. In contrast, the empirical political science literature has continued to emphasize the role of inward FDI, while exploring the role of political regimes and institutional quality. While the other two disciplines have also examined these issues, arguably the political scientists have done so in a rather more nuanced manner. Governance and Foreign Investment in China, India, and Taiwan by Yu Zheng, a political scientist, is an effort to take this literature forward. The main focus of the book is on understanding the impact of political regimes on FDI. The author argues that the nexus between the type of political regime and FDI is much more complex than is popularly believed. Using a combination of empirics and case studies of China, India, and Taiwan, …