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

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  • Chen, Yanjing

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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  • Chen, Yanjing, 2009. "Agglomeration and location of foreign direct investment: The case of China," China Economic Review, Elsevier, vol. 20(3), pages 549-557, September.
    • Handle: RePEc:eee:chieco:v:20:y:2009:i:3:p:549-557
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    Cited by:

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    2. Jr-Tsung Huang & Ming-Lei Chang, 2018. "Fiscal Transparency And Foreign Direct Investment In China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(04), pages 839-859, September.
    3. Sourafel Girma & Yundan Gong & Holger Görg & Sandra Lancheros, 2016. "Estimating direct and indirect effects of foreign direct investment on firm productivity in the presence of interactions between firms," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT, chapter 12, pages 227-239, World Scientific Publishing Co. Pte. Ltd..
    4. Natalia VECHIU, 2010. "Globalization and FDIs: determinants and competition effects in Central and Eastern European Countries," Working Papers 2010-2011_8, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Nov 2010.
    5. Natalia Vechiu, 2011. "Globalization and FDIs: determinants and competition effects in Central and Eastern European Countries," Working papers of CATT hal-02948133, HAL.
    6. Chunlai Chen & Yan Wu, 2019. "Interregional Impact Of Foreign Direct Investment On China’S Inland Urbanization," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(04), pages 997-1017, September.
    7. Jonathan Jones, 2017. "Agglomeration economies and the location of foreign direct investment: A meta-analysis," Journal of Regional Science, Wiley Blackwell, vol. 57(5), pages 731-757, November.
    8. Shalendra Sharma & Miao Wang & M. C. Sunny Wong, 2014. "FDI Location and the Relevance of Spatial Linkages: Evidence from Provincial and Industry FDI in China," Review of International Economics, Wiley Blackwell, vol. 22(1), pages 86-104, February.
    9. Philipp Harms & Pierre-Guillaume Méon, 2013. "The Composition of FDI in the MENA Region and Other Countries: Econometric Investigation and Implications for MENA Countries," Working Papers 793, Economic Research Forum, revised Nov 2013.
    10. Wanfu Jin & Chunshan Zhou, 2022. "Effect of Land Marketization Level and Land Prices on Foreign Direct Investment in China," Land, MDPI, vol. 11(9), pages 1-20, August.
    11. Marco Giansoldati & Rubens Pauluzzo, 2011. "The International Evolution of Italian and Chinese Districts: What Role for Lead Firms?," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 18(2), pages 471-486, December.
    12. Lisha He & Mia M Bennett & Ronghao Jiang, 2022. "The uneven geography of real estate investment by Mainland Chinese state-owned and private enterprises in the U.S.: Local market conditions, migration, and ethnic networks," Environment and Planning A, , vol. 54(4), pages 653-675, June.
    13. Junwei Shi & Haiyan Fu, 2017. "Has The Industrial Structure Of Western Provinces In China Been Differential? Evidence From The Sip Framework," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(04), pages 905-928, September.
    14. Lisha He & Ronghao Jiang & Mia M. Bennett, 2020. "The rise of Chinese foreign direct investment in the United States: Disentangling investment strategies of state‐owned and private enterprises," Growth and Change, Wiley Blackwell, vol. 51(4), pages 1562-1587, December.
    15. 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.
    16. Philipp Harms & Pierre†Guillaume Méon, 2018. "Good and useless FDI: The growth effects of greenfield investment and mergers and acquisitions," Review of International Economics, Wiley Blackwell, vol. 26(1), pages 37-59, February.
    17. Natalia Vechiu, 2011. "Globalization and FDIs: determinants and competition effects in Central and Eastern European Countries," Working Papers hal-02948133, HAL.

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