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The Effects Of Chinese Regional Conditions On The Location Choice Of Japanese Affiliates

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  • RYUHEI WAKASUGI

Abstract

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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  • Ryuhei Wakasugi, 2005. "The Effects Of Chinese Regional Conditions On The Location Choice Of Japanese Affiliates," The Japanese Economic Review, Japanese Economic Association, vol. 56(4), pages 390-407, December.
    • Handle: RePEc:bla:jecrev:v:56:y:2005:i:4:p:390-407
    DOI: 10.1111/j.1468-5876.2005.00337.x
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    Cited by:

    1. Roger Strange & Igor Filatotchev & Yung-chih Lien & Jenifer Piesse, 2009. "Insider Control and the FDI Location Decision," Management International Review, Springer, vol. 49(4), pages 433-454, September.
    2. Nielsen, Bo Bernhard & Asmussen, Christian Geisler & Weatherall, Cecilie Dohlmann, 2017. "The location choice of foreign direct investments: Empirical evidence and methodological challenges," Journal of World Business, Elsevier, vol. 52(1), pages 62-82.
    3. Chen, George Shih-Ku, 2009. "Agglomeration economies and the location of Taiwanese investment in China," MPRA Paper 13896, University Library of Munich, Germany.
    4. George Shih-Ku Chen, 2009. "Determinants Of Taiwanese Investment In China: An Agglomeration Economies-Based Perspective," Monash Economics Working Papers 01-09, Monash University, Department of Economics.
    5. Masahisa Fujita & Nobuaki Hamaguchi, 2012. "Japan and economic integration in East Asia: post-disaster scenario," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(2), pages 485-500, April.
    6. K. C. Fung & Alicia Garcia‐Herrero & Hitomi Iizaka & Alan Siu, 2005. "Hard Or Soft? Institutional Reforms And Infrastructure Spending As Determinants Of Foreign Direct Investment In China," The Japanese Economic Review, Japanese Economic Association, vol. 56(4), pages 408-416, December.
    7. Loretta Fung & Jin Tan Liu & Deborah L. Swenson, 2014. "Multinational Location Decisions and the Access to Imported Inputs," The Japanese Economic Review, Japanese Economic Association, vol. 65(2), pages 218-237, June.
    8. Mariana SEHLEANU, 2020. "Foreign Participation In The Share Capital Of Companies In Romania €“ A Regional Analysis," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 14(1), pages 33-42, November.
    9. Blanc-Brude, Frédéric & Cookson, Graham & Piesse, Jenifer & Strange, Roger, 2014. "The FDI location decision: Distance and the effects of spatial dependence," International Business Review, Elsevier, vol. 23(4), pages 797-810.
    10. Chen, George Shih-Ku, 2009. "Determinants of Taiwanese investment in China: An agglomeration economies-based perspective," MPRA Paper 13894, University Library of Munich, Germany.
    11. Suminori Tokunaga & Shaosheng Jin, 2011. "Market potential, agglomeration and location of Japanese manufacturers in China," Letters in Spatial and Resource Sciences, Springer, vol. 4(1), pages 9-19, March.
    12. Khanindra Ch. Das & Mantu Kumar Mahalik, 2021. "Assessment of Overseas Subsidiary Survival in Chinese Provinces: A Longitudinal Study of Indian Multinationals," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(2), pages 190-207, June.
    13. Norifumi Kawai, 2011. "The Role of Institutional Conditions in Japanese FDI in European Transition Economies," Chapters, in: Werner Pascha & Cornelia Storz & Markus Taube (ed.), Institutional Variety in East Asia, chapter 11, Edward Elgar Publishing.
    14. Werner Pascha & Cornelia Storz & Markus Taube (ed.), 2011. "Institutional Variety in East Asia," Books, Edward Elgar Publishing, number 14221.
    15. Ryuhei Wakasugi & Taiji Furusawa, 2014. "Symposium on Empirical Studies of International Trade and Firms: Introduction," The Japanese Economic Review, Japanese Economic Association, vol. 65(2), pages 137-141, June.

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