| This doctoral dissertation provides insights into the characteristics and determinants of foreign direct investment (FDI) in China, compares it to other developing countries like India, and explores the drivers of differences in FDI between China and India. Using panel data, the country-specific determinants of FDI in China and India are analyzed. In addition, the differences in FDI inflows between China and India are decomposed into differences due to determinants of FDI inflows and unexplainable differences.; The study findings revealed that China's FDI had distinct characteristics in terms of sources of its FDI inflows, modes of entry of foreign firms, and regional and sectoral distributions. The major determinants of FDI inflows in China have been China's huge domestic market, its high-level integration with the global economy, and low labor costs.; A dramatic gap in terms of FDI inflows was found between China and India. However, a comparison of China and India's inward FDI from OECD countries indicated that China and India each had their own advantages in attracting FDI. China's better performance in attracting FDI was mainly due to its larger domestic market and higher international trade ties with OECD countries. India, on the other hand, had advantage in its cheaper labor cost, lower country risk, geographic closeness to OECD countries, and cultural similarity. |
