Factors affecting location decisions of the economic headliners - exporters and foreign-owned firms - in China

Natalia Trofimenko

No 1645, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Foreign-owned firms are frequently viewed as an important source of new capital, access to world markets and employment generation and there exist numerous studies on the determinants of FDI flows and the role of incentives designed to attract FDI. Similarly important for economic growth are exporters, yet the factors that play a role in their location decisions have not been identified. Using a data set of 1,409 firms in China who report, among other things, why they have chosen a particular location, we find that the perceived importance of various site attributes differs considerably for those two types of firms: foreign-owned firms are attracted by the local market size, supply of skilled workers, and the quality of (telecommunications!) infrastructure; future exporters are driven by low rents, and fewer regulatory requirements and taxes; both types of firms care about the availability of government services.

Keywords: Foreign direct investment; exporters; determinants of location; Chinese cities (search for similar items in EconPapers)
JEL-codes: F21 L10 R11 R3 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1645

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