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Location Choice of Multinational Enterprises in China: Comparison between Japan and Taiwan

  • Kuo-I CHANG

    (Department of Applied Economics, National Chung Hsing University, Taiwan)

  • Kazunobu HAYAKAWA

    (Inter-disciplinary Studies Center, Institute of Developing Economies, Japan)

  • Toshiyuki MATSUURA

    (Institute of Economic and Industrial Studies, Keio University,Japan)

This paper explores the location choice of MNEs in China, shedding special light on the role of agglomeration of same-nationality firms. In particular, we examine how its role differs according to investors’ productivity. Furthermore, we compare the location choice of Japanese and Taiwanese MNEs in China, because Taiwanese MNEs are expected to experience less uncertainty in investing in China than Japanese MNEs, due to Taiwan’s linguistic and cultural advantages in China. We find that, less productive Japanese firms prefer to locate close to larger same-nationality agglomerations, there are no differences in location according to firms’ productivity in the case of Taiwanese firms.

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Paper provided by Economic Research Institute for ASEAN and East Asia (ERIA) in its series Working Papers with number DP-2011-01.

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Length: 35 pages.
Date of creation: 01 Feb 2011
Date of revision:
Handle: RePEc:era:wpaper:dp-2011-01
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  1. Disdier, Anne-Celia & Mayer, Thierry, 2004. "How different is Eastern Europe? Structure and determinants of location choices by French firms in Eastern and Western Europe," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 280-296, June.
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