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Determinants of City Choice of Foreign Direct Investment into China: The Role of Specialisation, Diversification and Competition Externalities

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  • Tao Song
  • Andrzej Cieslik

Abstract

In this paper we study empirically the determinants of location of inward FDI in China at the city level using firm‐level data for the period 1999–2009. In particular, we focus on the role of specialisation, diversification and competition externalities having controlled for the extensive set of city and regional characteristics including the regional market potential. We estimate both the conditional and multinomial logit models. We find that agglomeration externalities play an important role in determining the location of inward FDI in Chinese cities.

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  • Tao Song & Andrzej Cieslik, 2018. "Determinants of City Choice of Foreign Direct Investment into China: The Role of Specialisation, Diversification and Competition Externalities," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 109(3), pages 449-462, July.
    • Handle: RePEc:bla:tvecsg:v:109:y:2018:i:3:p:449-462
    DOI: 10.1111/tesg.12313
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    Cited by:

    1. Xiaofei Chen & Enru Wang & Jianfeng Guo & Changhong Miao, 2021. "Location choice and spatial distribution of the electronic information manufacturing industry in China," Growth and Change, Wiley Blackwell, vol. 52(3), pages 1410-1439, September.

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