The Linear and Nonlinear Causality between FDI, Economic Growth, Human Capital and Export: The Case of China
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William Sheng Liu, Zidi Wang
William Sheng Liu
Employing panel data spanning 1992-2016 and covering 29 Chinese provinces, this article examined the causal relationships between foreign direct investment (FDI), economic growth, human capital (HC) and export. Utilizing linear Granger causality, nonlinear nonparametric Hiemstra-Jones and nonlinear parametric Buckley models, we find that when using different spillover channels, FDI would exhibit both linear and nonlinear relationships with economic growth. Similarly, either linear or nonlinear causalities are also detected between FDI and HC/export.
FDI; causality; nonlinear; economic growth; China