Trade Costs and Location of Foreign Firms in China

Mary Amiti and Beata Javorcik

No 4978, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This study examines the determinants of entry by foreign firms, using information on 515 Chinese industries at the provincial level during 1998-2001. The analysis, rooted in the new economic geography, focuses on market and supplier access within and outside the province of entry, as well as production and trade costs. The results indicate that market and supplier access are the most important factors affecting foreign entry. Access to markets and suppliers in the province of entry matters more than access to the rest of China, which is consistent with market fragmentation due to underdeveloped transport infrastructure and informal trade barriers.

Keywords: Foreign direct investment; Trade costs; Market access; Supply access (search for similar items in EconPapers)
JEL-codes: F10 F23 (search for similar items in EconPapers)
Date: 2005-03
New Economics Papers: this item is included in nep-int, nep-sea and nep-tra
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Citations: View citations in EconPapers (25)

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Related works:
Journal Article: Trade costs and location of foreign firms in China (2008)
Working Paper: Trade costs and location of foreign firms in China (2005)
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