Demographics and FDI: Lessons from China's one-child policy

Arbeitspapier

Following the introduction of the one-child policy in China, the capital-labor (K/L) ratio of China increased relative to that of India, and, simultaneously, FDI inflows relative to GDP for China versus India declined. These observations are explained in the context of a simple neoclassical OLG paradigm. The adjustment mechanism works as follows: the reduction in the growth rate of the (urban) labor force due to the one-child policy permanently increases the capital per worker inherited from the previous generation. The resulting increase in China's (domestic K)/L thus "crowds out" the need for FDI in China relative to India. Our paper is a contribution to the nascent literature exploring demographic transitions and their effects on FDI flows.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CFS Working Paper Series ; No. 613

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Neoclassical Models of Trade ; International Investment; Long-term Capital Movements ; Demographic Trends, Macroeconomic Effects, and Forecasts ; Macroeconomic Analyses of Economic Development ; General Aggregative Models: Neoclassical
• Thema: Lucas paradox ; capital-labor ratio ; FDI-intensity ; one-child policy

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Donaldson, John B. ; Koulovatianos, Christos ; Li, Jian ; Mehra, Rajnish
• Ereignis: Veröffentlichung
• (wer): Goethe University Frankfurt, Center for Financial Studies (CFS)
• (wo): Frankfurt a. M.
• (wann): 2018

Weitere Informationen

• Handle: http://hdl.handle.net/10419/187488
• URN: urn:nbn:de:hebis:30:3-480187
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ