Foreign Direct Investment and Unequal Regional Economic Growth in China



DAY = (β00 + β10*YEAR + β20*YEAR2

+ (β01 + β11*YEAR + β21*YEAR2)DOPEN)DY

+ (β02 + β12*YEAR + β22*YEAR2)DY2

+ (β02 + β12*YEAR + β22*YEAR2)DY3

+ (β03 + β13*YEAR + β23*YEAR2)DOPEN                    (39)

APPENDIX 4. Alternative Model Estimations

The growth model when the multiplier depends on the actual income is as follows:

GY1 = .08929 + (8.6602 -.0007297Y1)*GI1

(20.57) (4.23)      (-2.21)

+.05341* (8.6602 -.0007297Y1)*(8.6602 - .0007297Y2)*GI2

(1.31)    (4.23)    (-2.21)        (4.23)    (-2.21)

- .1613*DUM89

(-15.40)

R2 = .6077 Adj.R2 = .6008

The alternative model where the total growth rate of the neighbour was used instead
of the growth in DAI was estimated to

GY1 = .05782 + (6.6010 -.0003139Y1)*GI1

(8.31) (4.41)     (-1.60)

+.05837* (6.6010 -.0003139Y1)*GY2

(3.40)    (4.41)    (-1.60)

- .1063*DUM89

(-7.79)

R2 = .6530 Adj.R2 = .6469

Without explicit neighbor effect

GY1 = .09405 + (9.9485 -.0010719Y1)*GI1 - .1637*DUM89

(23.82)   (7.08)     (-2.47)          (-15.60)

R2 = .5984 Adj.R2 = .5931

25



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