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Information costs, agglomeration economies and the location of foreign direct investment in China 1 This paper was presented at the 63rd Annual Meeting of the Association of Pacific Coast Geographers, Sept. 13-16, 2000, Arcata, CA

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Author Info
Canfei He
Abstract

H e C. (2002) Information costs, agglomeration economies and the location of foreign direct investment in China, Reg. Studies 36 , 1029-1036. Foreign investors suffer from adverse information asymmetry and face internal and external uncertainties in host economies. Better access to information and a variety of agglomeration economies could attenuate the disadvantages that foreign investors encounter. Statistical results strongly buttress the argument that foreign investors are inclined to favour such locations that could minimize information costs and offer a variety of agglomeration economies. Theoretical and policy implications and further research directions are discussed at the end. H e C. (2002) Les coûts de l'information, les économies d'agglomération et la localisation de l'investissement direct étranger en Chine, Reg. Studies 36 , 1029-1036. Les investisseurs étrangers souffrent d'une assymétrie d'information défavorable et affrontent des incertitudes internes et externes dansles zones d'accueil. Un meilleur accès à l'information et une diversité d'économies d'échelle pourraient modérer les inconvénients auxquels les investisseurs étrangers font face. Tout porte à croire que les investisseurs étrangers sont enclins à favoriser les emplacements qui risquent de minimiser les coûts de l'information et qui offrent une diversité d'économies d'agglomération. Dans la dernière partie, on examine les implications théoriques et de politique, et on discute des possibilités quant aux recherches plus approfondies. H e C. (2002) Unkosten zur Erlangung von Information, Ersparnisse durch Ballung und der Standort ausländischer Direktinvestierungen in China, Reg. Studies 36 , 1029-1036. In Gastländern sind ausländische Kapitalanleger Nachteilen durch ungünstige Informationssymmetrien und internen wie externen Unsicherheiten ausgesetzt. Besserer Zugang zu Information und einer Vielfalt von Ersparnissen durch Ballung könnten die Nachteile mildern, denen ausländische Kapitalanleger begegnen. Statistische Ergebnisse treten energisch dafür ein, daß ausländische Kapitalanleger geneigt sind, Standorte zu bevorzugen, die Unkosten für Zugang zu Information verringern, und eine Vielfalt von Ersparnissen dank Ballung anbieten. Abschließend werden theoretische und politische Implikationen, sowie weitere Forschungsrichtungen besprochen.

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Article provided by Taylor and Francis Journals in its journal Regional Studies.

Volume (Year): 36 (2002)
Issue (Month): 9 (December)
Pages: 1029-1036
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Handle: RePEc:taf:regstd:v:36:y:2002:i:9:p:1029-1036

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Related research
Keywords: Information Costs; Agglomeration Economies; Foreign Direct Investment; China;

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  1. Guimaraes, Paulo & Figueiredo, Octavio & Woodward, Douglas, 2000. "Agglomeration and the Location of Foreign Direct Investment in Portugal," Journal of Urban Economics, Elsevier, vol. 47(1), pages 115-135, January. [Downloadable!] (restricted)
  2. Yuko Kinoshita & Ashoka Mody, 2001. "Private information for foreign investment in emerging economies," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 448-464, May. [Downloadable!] (restricted)
  3. Harry G. Broadman & Xiaolun Sun, 1997. "The Distribution of Foreign Direct Investment in China," The World Economy, Blackwell Publishing, vol. 20(3), pages 339-361, 05. [Downloadable!] (restricted)
  4. Yingqi Wei, Xiaming Liu, David Parker, Kirit Vaidya, 1999. "The Regional Distribution of Foreign Direct Investment in China," Regional Studies, Taylor and Francis Journals, vol. 33(9), pages 857-867, December. [Downloadable!] (restricted)
  5. Head, C. Keith & Ries, John C. & Swenson, Deborah L., 1999. "Attracting foreign manufacturing: Investment promotion and agglomeration," Regional Science and Urban Economics, Elsevier, vol. 29(2), pages 197-218, March. [Downloadable!] (restricted)
  6. Nigel Driffield & Max Munday, 2000. "Industrial Performance, Agglomeration, and Foreign Manufacturing Investment in the UK," Journal of International Business Studies, Palgrave Macmillan Journals, vol. 31(1), pages 21-37, March. [Downloadable!] (restricted)
  7. Devereux, Michael P. & Griffith, Rachel, 1998. "Taxes and the location of production: evidence from a panel of US multinationals," Journal of Public Economics, Elsevier, vol. 68(3), pages 335-367, June. [Downloadable!] (restricted)
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  8. Smith Jr. , Donald F. & Florida Richard, 1994. "Agglomeration and Industrial Location: An Econometric Analysis of Japanese-Affiliated Manufacturing Establishments in Automotive-Related Industries," Journal of Urban Economics, Elsevier, vol. 36(1), pages 23-41, July. [Downloadable!] (restricted)
  9. Wheeler, David & Mody, Ashoka, 1992. "International investment location decisions : The case of U.S. firms," Journal of International Economics, Elsevier, vol. 33(1-2), pages 57-76, August. [Downloadable!] (restricted)
  10. Head, Keith & Ries, John, 1996. "Inter-City Competition for Foreign Investment: Static and Dynamic Effects of China's Incentive Areas," Journal of Urban Economics, Elsevier, vol. 40(1), pages 38-60, July. [Downloadable!] (restricted)
  11. Head, Keith & Ries, John & Swenson, Deborah, 1995. "Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments in the United States," Journal of International Economics, Elsevier, vol. 38(3-4), pages 223-247, May. [Downloadable!] (restricted)
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  12. Broadman, Harry G. & Xiaolun Sun, 1997. "The distribution of foreign direct investment in China," Policy Research Working Paper Series 1720, The World Bank. [Downloadable!]
  13. Chien-Hsun Chen, 1996. "Regional determinants of foreign direct investment in mainland China," Journal of Economic Studies, Emerald Group Publishing, vol. 23(2), pages 18-30, May. [Downloadable!] (restricted)
  14. Veugelers, Reinhilde, 1991. "Locational Determinants and Ranking of Host Countries: An Empirical Assessment," Kyklos, Blackwell Publishing, vol. 44(3), pages 363-82.
  15. John H Dunning, 1998. "Location and the Multinational Enterprise: A Neglected Factor?," Journal of International Business Studies, Palgrave Macmillan Journals, vol. 29(1), pages 45-66, March. [Downloadable!] (restricted)
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