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Agglomeration Effects and Japanese Food Industry Investment in China: Evidence from the Cities

Author

Listed:
  • Jin, Shaosheng
  • Tokunaga, Suminori
  • Akune, Yuko
  • Kageyama, Masahiro

Abstract

This paper uses the data from Chugoku Shinshutsu Kigyou Ichiran 2003-2004 (A View of Japanese Enterprises Investments in China 2003-2004) to study 1ocation choice of Japanese food industry investment in 231 Chinese cities from 1992 to 2001, paying a particular attention to agglomeration effects. A negative binominal model indicates that labor cost (WAGE) is the most important factor that deters Japanese food industry investment. Market size (GDP), raw material (MATER), port (PORT) and policy incentives (POLICY), however, have positive effects in Japanese food industry investment location choice in China. As for the three-tier agglomeration effects' test, the agglomeration effects of Japanese manufactures agglomeration (AG2) and Japanese food manufactures agglomeration (AG3) are confirmed, but not for foreign investment agglomeration (AG1).

Suggested Citation

  • Jin, Shaosheng & Tokunaga, Suminori & Akune, Yuko & Kageyama, Masahiro, 2006. "Agglomeration Effects and Japanese Food Industry Investment in China: Evidence from the Cities," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25307, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae06:25307
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    File URL: http://purl.umn.edu/25307
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    References listed on IDEAS

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    1. Cheng, Leonard K. & Kwan, Yum K., 2000. "What are the determinants of the location of foreign direct investment? The Chinese experience," Journal of International Economics, Elsevier, vol. 51(2), pages 379-400, August.
    2. Belderbos, Rene & Carree, Martin, 2002. "The Location of Japanese Investments in China: Agglomeration Effects, Keiretsu, and Firm Heterogeneity," Journal of the Japanese and International Economies, Elsevier, vol. 16(2), pages 194-211, June.
    3. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, March.
    4. Tuan, Chyau & Ng, Linda F. Y., 2004. "Manufacturing agglomeration as incentives to Asian FDI in China after WTO," Journal of Asian Economics, Elsevier, vol. 15(4), pages 673-693, August.
    5. Cletus C. Coughlin & Eran Segev, 2000. "Foreign Direct Investment in China: A Spatial Econometric Study," The World Economy, Wiley Blackwell, vol. 23(1), pages 1-23, January.
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    Citations

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    Cited by:

    1. Suminori Tokunaga & Shaosheng Jin, 2011. "Market potential, agglomeration and location of Japanese manufacturers in China," Letters in Spatial and Resource Sciences, Springer, vol. 4(1), pages 9-19, March.

    More about this item

    Keywords

    food industry; agglomeration; Japan; China; FDI; Agribusiness; International Relations/Trade; F21; Q13; Q18;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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