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Structure of Firm Location Choices: An Examination of Japanese Greenfield Investment in China

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  • Shaoming Cheng
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    Abstract

    This paper presents an empirical investigation of the location decision structure of Japanese investors in China. In this study, a nested logit model and rich Japanese firm-level greenfield manufacturing foreign direct investment data are calibrated together. This examination is not only driven by the unsatisfactory model specification of the conditional logit model in previous location choice analyses, specifically the violation of the independence from irrelevant alternatives assumption; but is also driven by the urgent need to better understand foreign investors' in general and Japanese investors' in particular location decision structure in China. Two potential hierarchical and sequential location decision-making structures of Japanese investors are then tested, which are respectively in line with the spatial divide of China's FDI preferential policies and with China's six traditional census areas. Copyright 2007 The Author Journal compilation 2007 East Asian Economic Association and Blackwell Publishing Ltd .

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    Bibliographic Info

    Article provided by East Asian Economic Association in its journal Asian Economic Journal.

    Volume (Year): 21 (2007)
    Issue (Month): 1 (03)
    Pages: 47-73

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    Handle: RePEc:bla:asiaec:v:21:y:2007:i:1:p:47-73

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    Cited by:
    1. George Shih-Ku Chen, 2009. "Determinants Of Taiwanese Investment In China: An Agglomeration Economies-Based Perspective," Development Research Unit Working Paper Series 01-09, Monash University, Department of Economics.
    2. Chen, George Shih-Ku, 2009. "Agglomeration economies and the location of Taiwanese investment in China," MPRA Paper 13896, University Library of Munich, Germany.

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