The impact of two-way FDI on total factor productivity in China and countries of the belt and road initiative

Figures & data

Figure 1. Comparison of China's two-way investment from 2009 to 2016. Source: ‘2017 World Investment Report’ (Unit: USD).

Table 1. Time evolution of total factor productivity in the Belt and Road countries.

Year	EC	TC	PEC	SEC	TFP
2006	1.301	1.159	0.973	1.338	1.508
2007	1.047	0.951	1.046	1.000	0.995
2008	1.034	0.991	1.025	1.009	1.025
2009	1.037	1.420	0.990	1.047	1.472
2010	1.022	0.940	1.035	0.988	0.961
2011	0.991	0.977	1.024	0.968	0.968
2012	1.016	0.955	1.028	0.988	0.970
2013	1.046	0.938	1.032	1.013	0.980
2014	1.102	0.944	0.938	1.175	1.040
2015	1.035	0.947	1.028	1.007	0.980
mean	1.009	1.056	1.005	1.035	1.092

Source: World Bank, China Statistical Yearbook and author’s calculations.

Table 2. Panel unit root check.

variable	LLC	HT	Breitung	IPS	Fisher
lnTFP	−32.9024***	0.0082***	−13.8388***	−10.8987***	4.3451***
lnEC	−21.6486***	0.0098***	−13.2932***	−7.5130***	4.0641***
lnTC	−1.6511**	0.0143***	−14.9533***	−6.8820***	1.3846*
lnSifdi	−1.2915*	0.1520***	0.6305	−3.4590***	−3.5193
lnSofdi	−8.1842***	0.2300**	−2.9861***	−1.6307**	3.5990***
lngro	−12.7316***	0.2513***	−2.6739**	−2.2631**	3.3267***
lnavgdp	−7.6025***	0.6908	−2.4029***	−0.2341	3.6512***
lncre	−10.5393*	0.5832*	−3.0769	−2.4527*	5.0155***
lntra	−15.2609***	0.4712	1.2414	−1.4477*	3.5066***
lnind	−7.3347***	0.9915	−1.3824*	−0.7967	3.2040***
lnfina	−9.3387**	0.2598*	−2.8745**	0.2049*	4.9746***

Note: *,**, *** 10%, 5% and 1%, respectively. LLC is Adjusted t* statistic, HT is OLS estimator, Breitung is Lambda statistic, IPS is Z-t-tilde-bar statistic, Fisher is Pm statistic.

Source: World Bank, China Statistical Yearbook and author's calculations.

Table 3. Difference GMM estimation results.

variable	Equation (8)	Equation (9)	Equation (10)
	lnTFP	lnEC	lnTC
L.lnTFP	−0.230** (0.108)	–	–
L2.lnTFP	−0.394*** (0.0500)	–	–
L3.lnTFP	0.0203** (0.00840)	–	–
L.lnEC	–	−0.521*** (0.0775)	–
L2.lnEC	–	−0.419*** (0.0847)	–
L3.lnEC	–	−0.0356 (0.0468)	–
L.lnTC	–	–	−0.785*** (0.0341)
L2.lnTC	–	–	−0.559*** (0.0382)
L3.lnTC	–	–	−0.102*** (0.0359)
lnSofdi	0.0157* (0.00852)	0.0265*** (0.00773)	−0.00517 (0.00437)
lnSifdi	0.00146 (0.00237)	0.00169 (0.00368)	−0.00107 (0.00491)
lngro	0.0706 (0.0688)	−0.0579 (0.0474)	0.0650** (0.0258)
lnavgdp	−0.298** (0.122)	−0.345*** (0.124)	−0.178* (0.0995)
lntra	−0.0689 (0.0419)	0.0513 (0.0624)	−0.167 (0.122)
lnfina	0.111*** (0.0413)	0.138** (0.0651)	0.0208 (0.0497)
lnind	0.224*** (0.0696)	0.300*** (0.0717)	−0.111*** (0.0348)
lncre	0.00632 (0.00672)	0.00819 (0.00866)	−0.00988 (0.00800)
Constant	−1.372*** (0.387)	−2.071*** (0.456)	0.990 (0.613)
Wald	186.16***	279.99***	5092.79***
AR(1)	−1.5281 (0.1265)	−0.4331 (0.6649)	0.4516 (0.6515)
AR(2)	0.5605 (0.5752)	1.2216 (0.2219)	2.8725 (0.1041)
Sargan test	26.44628 (0.4940)	29.282 （0.3474）	30.51649 （0.2915）
Observations	168	168	168
Number of DMU	36	36	36

Note: *,*,*** represent significant levels of 10%, 5% and 1% respectively. Explain that the number in the variable brackets is the standard error, AR (1), AR (2) and the value in the Sargan test brackets represents the P value.

Source: World Bank, China Statistical Yearbook and author's calculations.

Table 4. Empirical results in Asia and Europe.

variable	Asia			Europe
	Equation (8)	Equation (9)	Equation (10)	Equation (8)	Equation (9)	Equation (10)
	lnTFP	lnEC	lnTC	lnTFP	lnEC	lnTC
L.lnTFP	0.0546 (0.202)			−1.359*** (0.371)
L2.lnTFP	−0.364*** (0.119)			−1.051 (0.647)
L3.lnTFP	0.0244 (0.0196)			−0.782 (0.628)
L.lnEC		−0.558 (0.372)			−2.933*** (0.957)
L2.lnEC		−0.469 (0.336)			−0.841*** (0.168)
L3.lnEC		0.0410 (0.0567)			0.159 (0.438)
L.lnTC			−0.736*** (0.104)			−0.503 (2.381)
L2.lnTC			−0.511*** (0.0490)			−0.507 (2.010)
L3.lnTC			−0.0812** (0.0383)			−0.459 (0.656)
lnSofdi	0.0115 (0.0144)	0.0259 (0.0223)	−0.0103 (0.00904)	0.0256 (0.0226)	0.102** (0.0453)	0.0655 (0.0485)
lnSifdi	0.00825* (0.00498)	0.00296 (0.00870)	0.000633 (0.00353)	0.00735* (0.00431)	0.0293* (0.0153)	0.0147 (0.0265)
lngro	0.0260 (0.0430)	−0.0580 (0.108)	0.0690 (0.0732)	0.339 (0.888)	−5.055** (2.232)	−1.752 (10.20)
lnavgdp	−0.159 (0.143)	−0.279 (0.201)	−0.183** (0.0929)	−0.900* (0.475)	1.967** (1.003)	0.294 (3.131)
lntra	−0.119 (0.102)	0.0455 (0.120)	−0.224** (0.103)	−0.0634 (0.567)	−3.364** (1.434)	−1.704 (7.164)
lnfina	0.156* (0.0807)	0.0638 (0.119)	0.0513 (0.0524)	−0.131 (0.237)	0.944*** (0.333)	−0.818 (0.556)
lnind	0.233** (0.104)	0.313* (0.164)	−0.123 (0.0922)	1.280 (1.202)	1.526*** (0.524)	0.445 (5.868)
lncre	0.00324 (0.00968)	−0.000127 (0.0149)	−0.000163 (0.00723)	−0.0107 (0.00992)	−0.0180 (0.0298)	−0.0532 (0.0544)
Constant	−1.297*** (0.502)	−1.823*** (0.572)	1.107** (0.534)	−4.616 (3.226)	20.10* (10.28)	14.13 (81.21)
Wald	770.95***	234.32***	668.29***	879.39***	241.63***	3105.65***
AR(1)	−1.3909 （0.1642）	0.6101 （0.9514）	−0.1963 （0.8444）	−0.7895 (0.4298)	0.8542 (0.3930)	0.2000 (0.8415)
AR(2)	−0.3007 （0.7636）	−0.2111 （0.8328）	2.7525 （0.0059）	−0.3157 (0.7523)	−0.9798 (0.3317)	−0.0628 (0.9499)
Sargan test	8.7520 （0.8901）	7.9027 （0.9276）	10.8217 (0.7651)	0.1801 (1.000)	0.1331 (1.000)	1.8111 (1.000)
Observations	86	86	86	61	61	61
Number of DMU	17	17	17	13	13	13

Note: Same as Table 2.

Source: World Bank, China Statistical Yearbook and author's calculations.