Exploring the Dynamic Linkages Between FDI, Trade, and Economic Growth in Western China
A PVAR Approach
Bibliographic Data
| ID | 22006079 |
|---|---|
| Authors | Xiaomei Li (0000-0002-4449-9611, Universiti Sains Malaysia, corresponding author), Radziah Adam (0000-0003-1200-0289, Universiti Sains Malaysia, corresponding author) |
| Year | 2026 |
| Volume | 16 |
| Issue | 1 |
| Publication date | 2026-01-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | SAGE Open (JOURNAL) |
| Journal identifiers | ISSN: 2158-2440 • E-ISSN: 2158-2440 |
| Publisher | SAGE Publications (PUBLISHER • US) |
| DOI | 10.1177/21582440251407050 |
| OpenAlex | W7124988074 |
| Language | EN |
| References cited | 28 |
In the context of China’s regional development imbalance and transformation toward innovation-driven growth, understanding how foreign direct investment (FDI), trade, and innovation jointly influence regional economies has become a pressing issue. This study focuses on Western China, a region crucial to the national strategy for coordinated development yet often underrepresented in empirical research. Using provincial-level panel data from 12 western provinces from 2001 to 2022, a panel vector autoregressive (PVAR) model is employed to examine the dynamic relationships among FDI, exports, imports, research and development (R&D) investment, human capital, and economic growth. The results indicate that FDI and exports exert significant and persistent positive effects on regional economic growth, while imports and R&D investment contribute indirectly by promoting technological progress and enhancing competitiveness. Human capital also supports growth with a time lag, reflecting its cumulative nature. The findings provide empirical support for endogenous growth and global value chain theories, revealing that innovation and trade are key transmission channels of regional growth. This study contributes to the understanding of regional dynamic mechanisms and offers practical policy implications for promoting high-quality FDI, strengthening innovation, and developing human capital to achieve sustainable and inclusive growth in Western China, and provides useful reference for other developing countries and regions
Developing country · Emerging markets · Empirical evidence · Empirical research · Foreign direct investment · Human capital · Panel data · Economic and Technological Innovation · Global trade and economics · International Business and FDI
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On the mechanics of economic development
Economic Growth in a Cross Section of Countries
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Foreign Direct Investment’s Impact on China’s Economic Growth, Technological Innovation and Pollution
FDI, new development philosophy and China’s high-quality economic development
The China effect on regional economic integration
The governance of global value chains
Exports, policy choices, and economic growth in developing countries after the 1973 oil shock
Endogenous Technological Change
A Contribution to the Empirics of Economic Growth
How does foreign direct investment affect economic growth
| Highly cited | No |
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