Kiel Working Papers, Kiel Institute for World Economics
No 1645:
Factors Affecting Location Decisions of the Economic Headliners – Exporters and Foreign-Owned Firms – in China
Natalia Trofimenko
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
Keywords: foreign direct investment, exporters, determinants of location, Chinese cities; (follow links to similar papers)
JEL-Codes: R3; R11; F21; L10; (follow links to similar papers)
21 pages, August 2010
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