The Location Decisions of Foreign Logistics Firms in China : Does Transport Network Capacity Matter?
In recent years the logistic needs have created tremendous pressure on the hard transport infrastructure. Logistics and the harness of information technology are the key facilitators of mobility. The Chinese logistics market is still in its infancy and creates tremendous opportunities for investors. It recognized as one of important driving forces both for national economy and business. Beijing, Tianjin, Shanghai, Shenzhen and Guanzhou aspire to be regional or international logistics hubs and have adopted preferential policies in attracting FDIs in logistics. From 1996 to 2001, foreign capital invested in transportation, storage, post and telecommunications increased from USD6.96 billion to USD15.16 billion. This study looks at the location decisions of foreign logistics firms and identifies with the aid of a multinomial logit model factors that are crucial in attracting them to China. This is important as they have an important role to play in filling in the gap left by traditional Chinese firms, which largely concentrate, on warehousing and distribution. The results suggest that location of logistics firms depends on transport infrastructure, market size, labor quality and cost, agglomeration economies, communication cost, economic privatization degree, as well as government incentives. The importance of the above factors varies by source of region. European and North American firms favor higher population densities, lower labor cost, convenient airway transport and large cities while logistics firms from Hong Kong, Macao and Taiwan put more emphasis on communication infrastructure.
|Date of creation:||Jan 2005|
|Date of revision:|
|Contact details of provider:|| Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200|
Web page: http://www.eaber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cletus C. Coughlin & Eran Segev, 1999.
"Foreign direct investment in China: a spatial econometric study,"
1999-001, Federal Reserve Bank of St. Louis.
- 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, 01.
- Haishun Sun & Ashok Parikh, 2001. "Exports, Inward Foreign Direct Investment (FDI) and Regional Economic Growth in China," Regional Studies, Taylor & Francis Journals, vol. 35(3), pages 187-196.
- Yingqi Wei & Xiaming Liu & David Parker & Kirit Vaidya, 1999. "The Regional Distribution of Foreign Direct Investment in China," Regional Studies, Taylor & Francis Journals, vol. 33(9), pages 857-867.
- J J Boddewyn & Marsha Baldwin Halbrich & A C Perry, 1986. "Service Multinationals: Conceptualization, Measurement and Theory," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 17(3), pages 41-57, September.
- Button, Kenneth J. & Lietham, Scott & McQuaid, Ronald W. & Nelson, John D., 1995. "Transport and Industrial and Commercial Location," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 29(2), pages 189-206, May.
- 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.
- 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.
- Leitham, Scott & McQuaid, Ronald W. & D. Nelson, John, 2000. "The influence of transport on industrial location choice: a stated preference experiment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 34(7), pages 515-535, September.
- Chunlai Chen, 2011. "Foreign Direct Investment in China," Books, Edward Elgar Publishing, number 14100, 10.
- Carlton, Dennis W, 1983. "The Location and Employment Choices of New Firms: An Econometric Model with Discrete and Continuous Endogenous Variables," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 440-49, August.
- Ronald McQuaid & Scott Leitham & John Nelson, 1996. "Accessibility and Location Decisions in a Peripheral Region of Europe: A Logit Analysis," Regional Studies, Taylor & Francis Journals, vol. 30(6), pages 579-588.
- Daniel McFadden, 1977. "Modelling the Choice of Residential Location," Cowles Foundation Discussion Papers 477, Cowles Foundation for Research in Economics, Yale University.
- Coughlin, Cletus C & Terza, Joseph V & Arromdee, Vachira, 1991. "State Characteristics and the Location of Foreign Direct Investment within the United States," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 675-83, November.
- Hayashi, Yoshitsugu & Isobe, Tomohiko & Tomita, Yasuo, 1986. "Modelling the long-term effects of transport and land use policies on industrial locational behaviour : A discrete choice model system," Regional Science and Urban Economics, Elsevier, vol. 16(1), pages 123-143, February.
- 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.
- 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.
- 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.
- Canfei He, 2002. "Information costs, agglomeration economies and the location of foreign direct investment in China1," Regional Studies, Taylor & Francis Journals, vol. 36(9), pages 1029-1036.
- Canfei He, 2003.
"Location of foreign manufacturers in China: Agglomeration economies and country of origin effects,"
Papers in Regional Science,
Springer;Regional Science Association International, vol. 82(3), pages 351-372, September.
- Canfei He, 2003. "Location of foreign manufacturers in China: Agglomeration economies and country of origin effects," Economics of Governance, Springer, vol. 82(3), pages 351-372, September.
- Bartik, Timothy J, 1985. "Business Location Decisions in the United States: Estimates of the Effects of Unionization, Taxes, and Other Characteristics of States," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(1), pages 14-22, January.
- 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.
- 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.
When requesting a correction, please mention this item's handle: RePEc:eab:tradew:22568. 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: (Shiro Armstrong)
If references are entirely missing, you can add them using this form.