Abstract:Based on IDP theory, this study uses panel data of 146 countries from 1980 to 2011 to analyze the core issue of "the impact of attracting foreign investment on foreign investment and its mechanism". The results show that, from the global level, a country's attracting foreign investment has a significant positive impact on its foreign investment; and the promoting effect of attracting foreign investment on the host country's foreign investment is closely related to the characteristics of the host country: the stronger the host country's absorbing capacity and the larger the market scale, the more conducive it is to develop its own foreign investment capacity from attracting foreign investment. At the same time, it is found that the impact of a country's economic development level on the host country's foreign investment, to a greater extent, is also implemented by directly affecting its absorption effect on the inflow of FDI, and this mechanism is robust.

Authors:Pan W.Q., Chen X, Chen T.T., Gu L.J

China Journal of Economics, Vol. 3, 2015(in Chinese)