AN EMPIRICAL STUDY ON THE IMPACT OF ECONOMIC AGGLOMERATION ON FDI LOCATION CHOICE IN CHINA

Author(s)

Liping Guo

Author affiliation

School of Economics and Management, Zhongyuan University of Technology, Zhengzhou 450000, China

Abstract

FDI of multinational corporations is one of the most dynamic factors of economic growth in the world. All countries and regions in the world are trying to adopt various preferential measures to attract foreign investment to maintain economic growth. There are many factors that determine the location selection of FDI, but the economic agglomeration plays a decisive role. This paper analyzes impact of economic agglomeration factors about FDI location choice in China and East, Middle and Western region, by econometric model, using data from 1985 to 2016. The results show that market capacity, infrastructure, labor costs, regional openness and pre-concentration of foreign direct investment have different degrees of impact on FDI location selection, among which infrastructure has the greatest impact. In addition, for different regions, different economic agglomeration factors also have different influence degree for the location choice of FDI.

Keywords

Foreign Direct Investment, Economic Agglomeration, Location Choice