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Factors affecting location decisions of the economic headliners - exporters and foreign-owned firms - in China

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  • Trofimenko, Natalia

Abstract

Foreign-owned firms are frequently viewed as an important source of new capital, access to world markets and employment generation and there exist numerous studies on the determinants of FDI flows and the role of incentives designed to attract FDI. Similarly important for economic growth are exporters, yet the factors that play a role in their location decisions have not been identified. Using a data set of 1,409 firms in China who report, among other things, why they have chosen a particular location, we find that the perceived importance of various site attributes differs considerably for those two types of firms: foreign-owned firms are attracted by the local market size, supply of skilled workers, and the quality of (telecommunications!) infrastructure; future exporters are driven by low rents, and fewer regulatory requirements and taxes; both types of firms care about the availability of government services.

Suggested Citation

  • Trofimenko, Natalia, 2010. "Factors affecting location decisions of the economic headliners - exporters and foreign-owned firms - in China," Kiel Working Papers 1645, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1645
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    References listed on IDEAS

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    Cited by:

    1. Metaxas, Theodore & Duquenne, Marie Noelle, 2015. "Small and Medium Sized Firms’ Competitiveness and Territorial Characteristics by using a MLR approach," MPRA Paper 66848, University Library of Munich, Germany.
    2. Metaxas, Theodore & Kallioras, Dimitris, 2013. "Small and medium-sized firms' competitiveness and territorial characteristics/assets: The cases of Bari, Varna and Thessaloniki," MPRA Paper 52446, University Library of Munich, Germany.
    3. Metaxas, Theodore & Economou, Athina, 2012. "Assessing the determinants of Firms’ Competitiveness in Greece: A Structural Equation Modeling Analysis," MPRA Paper 42794, University Library of Munich, Germany.
    4. METAXAS, Theodore, 2011. "Territorial Assets And Firms’ Competitiveness In Southern Europe: Industrial Vs Commercial Firms Using Exploratory Factor Analysis," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 11(1).
    5. Theodore METAXAS & Athina ECONOMOU, 2016. "Assesing The Determinantts Of Firms’ Competitiveness In Greece: A Structural Equation Modeling Analysys," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 17, pages 91-113, June.

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    More about this item

    Keywords

    Foreign direct investment; exporters; determinants of location; Chinese cities;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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