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Agglomeration and location of foreign direct investment: The case of China

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  • Chen, Yanjing
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    Abstract

    This paper investigates the effect of agglomeration on foreign direct investment (FDI) location in China. We use different measures of agglomeration, and test both within and across region agglomeration effect. The results suggest that urbanization, foreign-specific agglomeration and industry diversity have positive impact on FDI location. Urbanization, foreign-specific agglomeration and industry specialization, also significantly promote industrial FDI. The results also suggest there exist both within and across region agglomeration effects. Other factors including market size, wage, education, road density, government policy and trade cost also have significant impacts on FDI location.

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    Bibliographic Info

    Article provided by Elsevier in its journal China Economic Review.

    Volume (Year): 20 (2009)
    Issue (Month): 3 (September)
    Pages: 549-557

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    Handle: RePEc:eee:chieco:v:20:y:2009:i:3:p:549-557

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    Web page: http://www.elsevier.com/locate/chieco

    Related research

    Keywords: FDI location Agglomeration Geography;

    References

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    Cited by:
    1. Lin, Hui-Lin & Li, Hsiao-Yun & Yang, Chih-Hai, 2011. "Agglomeration and productivity: Firm-level evidence from China's textile industry," China Economic Review, Elsevier, vol. 22(3), pages 313-329, September.

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