Agglomeration and location of foreign direct investment: The case of China |
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Authors: | Yanjing Chen |
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Institution: | aSchool of International Trade and Economics, University of International Business and Economics, Beijing, 100029, China |
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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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Keywords: | FDI location Agglomeration Geography |
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