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Demographics and FDI: Lessons from China's One-Child Policy / John B. Donaldson, Christos Koulovatianos, Jian Li, Rajnish Mehra.
- Format:
- Book
- Author/Creator:
- Donaldson, John B.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w24256.
- NBER working paper series no. w24256
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Demographics and FDI
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2018.
- Summary:
- Following the introduction of the one-child policy in China, the capital-labor ratio of China increased relative to that of India, while FDI/GDP inflows to China vs India simultaneously 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 increases the capital per worker inherited from the previous generation. The resulting increase in China's domestic capital-labor ratio 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.
- Notes:
- Print version record
- January 2018.
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