@article{oai:omu.repo.nii.ac.jp:00000908,
 author = {Han, Chi},
 journal = {Journal of economics, business and law},
 month = {Mar},
 note = {application/pdf, We consider a two-country growth model to analyze effects of foreign direct investment (FDI) on economic growth and welfare in China. China has conducted an opening and restricted policy: FDI is accepted from other countries but capital outflows are restricted. In this paper, we denote China as a developing country and assume that another developed country exists. We also assume that any potential investor in each of both countries has no sufficient internal funds to operate his investment project; he must require external financing in their own credit market subject to a costly state verification (CSV) problem that leads credit rationing. In this environment, we find that the two countries will simultaneously converge to an identical, unique, nontrivial steady state with an identical initial capital stock. Compared to this, Boyd and Smith (1997) argued that, when the two countries open their credit markets, the two countries would respectively converge to asymmetric steady state with capital flight in less-developing country. Therefore, the opening and restricted policy in China not only makes China fester to approach the steady state, but also makes China avoid capital flight. Furthermore, compared to closed economies, the opening and restricted policy in China don't change the welfare of either of the two countries in the steady state, though Cardoso and Dornbusch (1989) and Reis (2001) argued that FDI might reduce the welfares of developing countries., Journal of economics, business and law. 2003, 5, p.63-83},
 pages = {63--83},
 title = {<ARTICLE>Capital Market Imperfections, Credit Markets, and Foreign Direct Investment},
 volume = {5},
 year = {2003}
}