Location factors and country-of-origin differences: An empirical analysis of FDI in China

Using foreign direct investment data of 50 locations over a 4-year period in China, the effects of heterogeneous location factors and countries-of-origin on the level of FDI inflow are investigated. Results indicate that while market potential, cost factors, and infrastructure adequacy affect FDI lo...

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Bibliographic Details
Published in:Multinational business review 2000-04, Vol.8 (1), p.60
Main Authors: Zhao, Hongxin, Zhu, Gangti
Format: Article
Language:English
Subjects:
Costs
Decision making
Efficiency
Foreign investment
Horizontal integration
Host country
Hypotheses
Infrastructure
Investors
Market positioning
Market potential
Preferences
Profit maximization
Profits
Regression analysis
Rule of origin
Studies
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Summary:Using foreign direct investment data of 50 locations over a 4-year period in China, the effects of heterogeneous location factors and countries-of-origin on the level of FDI inflow are investigated. Results indicate that while market potential, cost factors, and infrastructure adequacy affect FDI location preference, foreign investors do reveal divergent sensitivity to a set of location variables. Statistical results from structure break tests and multiple regression analysis showed that responses to location-specific factors vary significantly among foreign investors with different countries-of-origin.
ISSN:1525-383X
2054-1686