Skip to main content

Individual Preferences for FDI in Developing Countries: Experimental Evidence from China

  • Xiaojun Li (a1) and Ka Zeng (a2)

Foreign direct investment (FDI) into developing countries such as India and China is often met with domestic backlash by the citizens of the host country, and backlash in the form of protests and other disruptive behavior has increased the salience of public opinion in FDI policy. As one of the first survey experiments assessing Chinese citizens’ attitudes toward FDI, this paper adopts a novel conjoint design to evaluate the impact, in the present project, of individual respondent characteristics and specific FDI features on respondents’ preferences. Importantly, we find that low-skilled respondents are not necessarily more likely to support labor-intensive FDI, a result that challenges the conventional wisdom that individuals in developing countries abundantly endowed with labor should be more likely to support low-skilled FDI. Instead, citizens are more concerned about FDI projects’ country of origin and impact on the local job market when forming their preferences.

Hide All
Badkar, Mamta. 2012. “Huge Protests Erupt in India Over Latest Economic Plan.” Business Insider, 20 September.
Bechtel, Michael M., and Scheve, Kenneth F.. 2013. “Mass Support for Global Climate Agreements Depends on Institutional Design.” Proceedings of the National Academy of Sciences 110 (34): 13763–8.
Dean, Judith M., Lovely, Mary E., and Wang, Hua. 2009. “Are Foreign Investors Attracted to Weak Environmental Regulations? Evaluating the Evidence from China.” Journal of Development Economics 90 (1): 113.
Dunning, John H. 1998. Explaining International Production. London: Unwin Hyman.
Dunning, John H. 1993. Multinational Enterprises and the Global Economy. Reading, Mass: Addison-Wesley.
Easson, Alex. 2001. “Tax Incentives for Foreign Direct Investment Part 1: Recent Trends and Countertrends.” Bulletin for International Taxation 55: 266–74.
Feenstra, Robert C. and Hanson, Gordon H.. 1997. “Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras.” Journal of International Economics 42 (3–4): 371–93.
Griffith, Rachel. 1999. “Using the ARD Establishment Level Data to Look at Foreign Ownership and Productivity in the United Kingdom.” Economic Journal 109 (June): 416–42.
Guisinger, Alexandra. 2009. “Determining Trade Policy: Do Voters Hold Politicians Accountable?International Organization 63 (3): 533–57.
Hainmueller, Jens, and Hopkins, Daniel J.. 2014. “The Hidden American Immigration Consensus: A Conjoint Analysis of Attitudes toward Immigrants.” American Journal of Political Science. doi: 10.1111/ajps.12138.
Hansen, Kasper M., Olsen, Asmus L., and Bech, Mickael. 2014. “Cross-National Yardstick Comparisons: A Choice Experiment on a Forgotten Voter Heuristic.” Political Behavior. doi: 10.1007/s11109-014-9288-y.
Harms, Philipp and Méon, Pierre-Guillaume. 2014. “Good and Bad FDI: The Growth Effects of Greenfield Investment and Mergers and Acquisitions in Developing Countries.” CEB Working Paper No. 14/021.
Iida, Keisuke. 2014. “Political Risks and Japanese Foreign Direct Investment in East Asia: A Case Study of ‘China-Plus-One’.” Korean Journal of International Studies 13 (2): 383410.
Jensen, Nathan M. and Lindstädt, René. 2012. “Globalization with Whom: Context-Dependent Foreign Direct Investment Preferences.” Working Paper.
Kelly, David A., Rajan, Ramkishen S., and Goh, Gillian H. L.. 2006. Managing Globalization: Lessons from China and India. Singapore: World Scientific Press.
Li, Xiaojun, Shi, Weiyi, and Zhu, Boliang. 2017. “The Face of Internet Recruitment: Evaluating the Labor Markets of Online Crowdsourcing Platforms in China.” 21st Century China Center Research Paper No. 2017-04. Available at SSRN:
Mansfield, Edward D. and Mutz, Diana C.. 2009. “Support for Free Trade: Self-Interest, Sociotropic Politics, and Out-Group Anxiety.” International Organization 63 (3): 425–57.
Naoi, Megumi and Kume, Ikuo. 2011. “Explaining Mass Support for Agricultural Protectionism: Evidence from a Survey Experiment During the Global Recession.” International Organization 65 (4): 771–95.
Orme, B. 1998. Sample Size Issues for Conjoint Analysis Studies. Sequim: Sawtooth Software Technical Paper.
Pandya, Sonal. 2010. “Labor Markets and the Demand for Foreign Direct Investment.” International Organization 64 (3): 389409.
Pandya, Sonal. 2014. Trading Spaces: Foreign Direct Investment Regulation, 1970–2000. New York, NY: Cambridge University Press.
Reilly, James. 2013. Strong Society, Smart State: The Rise of Public Opinion in China's Japan Policy. New York: Columbia University Press.
Rho, Sungmin and Tomz, Michael. 2017. “Why Don't Trade Preferences Reflect Economic Self-Interest?International Organization 71 (S1): S85–S108.
Spilker, Gabriele, Bernauer, Thomas, and Umaña, Víctor. 2016. “Selecting Partner Countries for Preferential Trade Agreements. Experimental Evidence from Costa Rica, Nicaragua, and Vietnam.” International Studies Quarterly 60 (4): 706–18.
Taylor, Christopher T. 2000. “The Impact of Host Country Government Policy on US Multinational Investment Decisions.” World Economy 23 (5): 635–48.
Wang, Miao and Sunny Wong, M. C.. 2009. “What Drives Economic Growth? The Case of Cross-Border and Greenfield FDI Activities.” Kyklos 62 (2): 316–30.
Yang, Daying. 2002. “Mirror for the Future or the History Card? Understanding the ‘History Problem’.” In Soderberg, Mark (Ed.), Chinese-Japanese Relations in the Twenty-First Century: Complementarity and Conflict (pp. 1031). London: Routledge.
Zhu, Boliang. 2011. “Individual Skill Endowments and Attitudes toward High/Low-Skill Intensive FDI: Evidence from a Survey Experiment.” Paper presented at the Annual Meeting of International Political Economy Society.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Journal of Experimental Political Science
  • ISSN: 2052-2630
  • EISSN: 2052-2649
  • URL: /core/journals/journal-of-experimental-political-science
Please enter your name
Please enter a valid email address
Who would you like to send this to? *


Type Description Title
Supplementary materials

Li and Zeng supplementary material
Online Appendix

 Word (1.6 MB)
1.6 MB


Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed