Following the introduction of the one-child policy in China, the capital-labor (K/L) ratio of China increased relative … to that of India, and, simultaneously, FDI inflows relative to GDP for China versus India declined. These observations … inherited from the previous generation. The resulting increase in China's (domestic K)/L thus ‘crowds out' the need for FDI in …

rich to poor countries. In this paper we consider a natural experiment: using China as the treated country and India as the … control, we show that the dynamics of the relative FDI flows subsequent to the implementation of China's one-child policy, as …-child policy in China, the capital-labor (K/L) ratio of China increased relative to that of India, and, simultaneously, relative …