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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