Lecture on "Ideological Taboos, Entry Barriers and FDI Attraction: Evidence from a Quasi-Natural Experiment in China",
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Lecture on "Ideological Taboos, Entry Barriers and FDI Attraction: Evidence from a Quasi-Natural Experiment in China",
DateandTime: 2017-06-14 19:17:28

Speaker: Liu Ruiming, Associate Professor, National Academy of Development and Stategy, Renmin University of China

Date: June 14, 2017

Time: 10:00 am

Location: 513 Lecture Hall, Shaw Science Hall, Central Campus

Sponsor: the Center for Economic Research Shandong University


Although foreign direct investments (FDIs) are regarded as important growth engines for developing and transitional countries, these countries often impose a wide variety of entry barriers on these investments. One important reason behind these entry barriers is ideological taboos, but do these taboos actually affect the inflow of FDIs? As the largest developing and transitional country in the world, China has conducted its large-scale "Cultural System Reform" pilot program in 2003 and 2006, which eliminated its existing ideological taboos and loosened its FDI entry barriers objectively. This quasi-natural experiment provides an excellent opportunity for us to answer the above question. By treating the Chinese cultural system reform as an "exogenous shock," this paper uses the panel data of 283 prefecture-level cities in China for 1994–2013 and the difference-in-differences method to evaluate the impact of the cultural system reform on regional FDI. We found that the cultural system reform significantly promoted the inflow of FDIs by deregulating institutions and removing entry barriers, and the attraction of FDI has gradually increased along with the deepening of the reform. Our conclusions still hold after performing several robustness tests, thereby highlighting ideologies as important barriers to the inflow of FDIs into less developed countries. Developing and transitional countries must also attract FDIs by breaking their ideological taboos.


Prof. Liu Ruiming completed his Ph.D. In Economics from Fudan University. He is currently associate professorof National Academy of Development and Stategy at Renmin University of China. His main research interests include Transitional Economy and Development Economics. 

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Edited by: Zhang Xinyuan

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