Agglomeration Effects and Location Choice of Japanese Electronics Firms in China: The Case of Provincial Data

Suminori Tokunaga () and Shaosheng Jin
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Suminori Tokunaga: Department of Appropriate Technology and Science for Sustainable Development Graduate School of Lofe and Environmental Sciences University of Tsukuba, Ibaraki 305-8572, Japan
Shaosheng Jin: Department of Appropriate Technology and Science for Sustainable Development Graduate School of Lofe and Environmental Sciences University of Tsukuba, Ibaraki 305-8572, Japan

Jurnal Ekonomi Malaysia, 2007, vol. 41, 147-160

Abstract: This article examines the hypothesis releated to the role of agglomeration effects on location choice behaviour of Japanese electronics firmsin China. According to Krugman ( 1991), Fujita and Krugman (1995), Fujita, Krugman, and Venables (1999), Agglomeration effects play an important role on location choice behaviour. Using the data of Cyugoku Sinsyutsu Kigyou Ichiran 2003-2004 (Japanese enterprises investment in China 2003-2004), we estimate a location choice model of japanese electronics firms using market potential, industrial agglomeration, and traditional factors such as wage, infrastrukture, and policy incentives as explanatory variables. The result of this estimation shows that the agglomeration effects play an important role on location choice behaviour of the Japanese electronics firms in china.

Date: 2007
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