IDEAS home Printed from
   My bibliography  Save this article

The structure of location choice for new U.S. manufacturing investments in Asia-Pacific


  • Mataloni Jr., Raymond J.


Despite an extensive literature on the determinants of the foreign location choices by multinational firms, researchers have only recently begun to systematically examine how these firms form their location consideration sets. When considering new foreign locations, do firms evaluate the attributes of the alternatives at the national level, the sub-national regional level, at some other level of geographical aggregation, or using some combination of these? This paper employs discrete choice models to examine how U.S. multinational firms form their consideration sets over locations in the Asia-Pacific area and to identify some of the relevant location attributes. The results are consistent with a sequential, or hierarchical, decision-making process in which firms first select a host country based on one set of attributes and then select a region within that country is selected based on another set of attributes. Most of the location attributes that are found to be significant are related to productivity-enhancing features, such as worker skills, industrial agglomeration, and extensive transportation infrastructure, rather than features related to factor prices, such as low-wage labor.

Suggested Citation

  • Mataloni Jr., Raymond J., 2011. "The structure of location choice for new U.S. manufacturing investments in Asia-Pacific," Journal of World Business, Elsevier, vol. 46(2), pages 154-165, April.
  • Handle: RePEc:eee:worbus:v:46:y:2011:i:2:p:154-165

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Homin Chen & Tain-Jy Chen, 1998. "Network Linkages and Location Choice in Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 29(3), pages 445-467, September.
    2. Peter J Buckley & Timothy M Devinney & Jordan J Louviere, 2007. "Do managers behave the way theory suggests? A choice-theoretic examination of foreign direct investment location decision-making," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(7), pages 1069-1094, December.
    3. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 112-134.
    4. John H Dunning, 1998. "Location and the Multinational Enterprise: A Neglected Factor?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 29(1), pages 45-66, March.
    5. Bruce A. Blonigen & Miao Wang, 2004. "Inappropriate Pooling of Wealthy and Poor Countries in Empirical FDI Studies," NBER Working Papers 10378, National Bureau of Economic Research, Inc.
    6. Robert Z. Lawrence, 1993. "Japan?s Low Levels of Inward Investment: The Role of Inhibitions on Acquisitions," NBER Chapters,in: Foreign Direct Investment, pages 85-112 National Bureau of Economic Research, Inc.
    7. Jan Johanson & Jan-Erik Vahlne, 1977. "The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 8(1), pages 23-32, March.
    8. Chen Chunlai, 1997. "Provincial Characteristics and Foreign Direct Investment Location Decision within China," Chinese Economies Research Centre (CERC) Working Papers 1997-16, University of Adelaide, Chinese Economies Research Centre.
    9. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, March.
    10. Shaoming Cheng & Roger Stough, 2006. "Location decisions of Japanese new manufacturing plants in China: a discrete-choice analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 40(2), pages 369-387, June.
    11. Hillebrand, Evan, 2008. "The Global Distribution of Income in 2050," World Development, Elsevier, vol. 36(5), pages 727-740, May.
    12. Subramanian Rangan, 2000. "Search and Deliberation in International Exchange: Microfoundations to Some Macro Patterns," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 31(2), pages 205-222, June.
    13. Ronald C. Fisher, 1997. "Effects of state and local public services on economic development," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 53-82.
    14. Brown, Martin & Philips, Peter, 1986. "Craft Labor and Mechanization in Nineteenth-Century American Canning," The Journal of Economic History, Cambridge University Press, vol. 46(03), pages 743-756, September.
    15. Helpman, Elhanan, 1984. "A Simple Theory of International Trade with Multinational Corporations," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 451-471, June.
    16. Park, C Whan & Lessig, V Parker, 1981. " Familiarity and Its Impact on Consumer Decision Biases and Heuristics," Journal of Consumer Research, Oxford University Press, vol. 8(2), pages 223-230, September.
    17. N/A, 2007. "At a Glance," National Institute Economic Review, National Institute of Economic and Social Research, vol. 200(1), pages 2-3, April.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Blanc-Brude, Frédéric & Cookson, Graham & Piesse, Jenifer & Strange, Roger, 2014. "The FDI location decision: Distance and the effects of spatial dependence," International Business Review, Elsevier, vol. 23(4), pages 797-810.
    2. Nielsen, Bo Bernhard & Asmussen, Christian Geisler & Weatherall, Cecilie Dohlmann, 2017. "The location choice of foreign direct investments: Empirical evidence and methodological challenges," Journal of World Business, Elsevier, vol. 52(1), pages 62-82.
    3. Oladottir, Asta Dis & Hobdari, Bersant & Papanastassiou, Marina & Pearce, Robert & Sinani, Evis, 2012. "Strategic complexity and global expansion: An empirical study of newcomer Multinational Corporations from small economies," Journal of World Business, Elsevier, vol. 47(4), pages 686-695.
    4. Martijn J. Burger & Bert van der Knaap & Ronald S. Wall, 2013. "Revealed competition for greenfield investments between European regions," Journal of Economic Geography, Oxford University Press, vol. 13(4), pages 619-648, July.
    5. repec:gam:jsusta:v:9:y:2017:i:5:p:800-:d:98285 is not listed on IDEAS
    6. Chen, Chung-Jen & Hsiao, Yung-Chang, 2013. "The endogenous role of location choice in product innovations," Journal of World Business, Elsevier, vol. 48(3), pages 360-372.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:worbus:v:46:y:2011:i:2:p:154-165. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.