2011 Awards for Excellence

Citation

(2012), "2011 Awards for Excellence", Journal of Chinese Economic and Foreign Trade Studies, Vol. 5 No. 1. https://doi.org/10.1108/jcefts.2012.36005aaa.001

2011 Awards for Excellence

Article Type: 2011 Awards for Excellence From: Journal of Chinese Economic and Foreign Trade Studies, Volume 5, Issue 1

The following article was selected for this year’s Outstanding Paper Award for Journal of Chinese Economic and Foreign Trade Studies

“A causality analysis of the FDI-wages-productivity nexus in China”

Bala RamasamyChina Europe International Business School, Shanghai, Peoples Republic of ChinaMatthew YeungLee Shau Kee School of Business and Administration, The Open University of Hong Kong, Hong Kong SAR, Peoples Republic of China

Purpose - The purpose of this paper is to examine the relationships between foreign direct investment (FDI), wages and productivity in China. The direction of causality among these variables is also to be emphasized.Design/methodology/approach - The authors develop a system of equations and test the relationships based on a vector autoregressive regression (VAR) model and two-step generalized method of moments (GMM)-type estimation approach. They use a panel data set of China’s provinces for a 20-year time period, 1988-2007, and also distinguish between the coastal and inland provinces.Findings - The result confirms the cheap labor argument for China, although this particularly true for inland provinces. In the coastal provinces, FDI inflow influences the wage rates upwards. FDI also has a positive effect on productivity, particularly in the coastal provinces, but does not act as a significant determinant of FDI.Research limitations/implications - Factors other than wage rates and labor productivity are also important determinants of FDI. This paper focuses on the interplay of these three variables, while assuming other factors constant.Practical implications - Cheap labor as an attraction of FDI is a short term policy. Improvements in productivity should be the focus both in the coastal and the inland provinces. A conducive business environment, a suitable education policy and incentives for greater RD contribute toward improving labor productivity, which in turn attracts greater FDI inflow.Originality/value - The paper provides empirical evidence on the direction of causality between FDI inflow, wages rates and labor productivity in one system of equations.

Keywords: China, International investments, Productivity rate, Pay structures

www.emeraldinsight.com/10.1108/17544401011016654

This article originally appeared in Volume 3 Number 1 2010, pp. 5-23, of Journal of Chinese Economic and Foreign Trade Studies, Editors: Dr Junjie Hong, Dr Chengqi Wang and Dr John Gong

The following articles were selected for this year’s Highly Commended Award

“Culture distance and foreign equity ownership in international joint ventures: evidence from China”

Qiangbing Chen, Yali Liu and Lu Jiang

This article originally appeared in Volume 3 Number 3, 2010, Journal of Chinese Economic and Foreign Trade Studies

“Health, education, and economic growth in East Asia”

Hongyi Li and Huang Liang

This article originally appeared in Volume 3 Number 2, 2010, Journal of Chinese Economic and Foreign Trade Studies

Outstanding Reviewers

Professor Qiang WangUniversity of International Business and Economics, Peoples Republic of China

Dr Panayotis G MichaelidesNational Technical University of Athens, Greece