THE EFFECTS OF CHINESE REGIONAL CONDITIONS ON THE LOCATION CHOICE OF JAPANESE AFFILIATES*
Ryuhei Wakasugi ()
The Japanese Economic Review, 2005, vol. 56, issue 4, 390-407
In the 1990s, Japanese firms rapidly increased the number of locations of their affiliates in China, displaying considerable regional heterogeneity in the abundance of better educated human resources, wage costs, increasing numbers of special economic zones, industrial agglomeration and the enrichment of social infrastructure. This paper employs conditional logit estimations to examine how these heterogeneous factors affect the location choice of Japanese affiliates by correlating Japanese data to data from Chinese provinces and Special Cities. The results reveal that factors related to human resources are more important than the ‘hard’ factors in attracting foreign firms to invest China.
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