YAN Yingen:Location Choice of FDI: Market Potential, Geographic Agglomeration and the Same Country of Origin

Abstract  In this paper, we first study the theoretical foundation of location choice and provide the empirical hypothesis that market potential, geographic agglomeration, the same country of origin, regional wage level and regional policy can influence the location choice of FDI.Then, based on the contacts of 19 provinces of China signed with 20 nations or regions from 2000 to 2010 and by using Tobit Model, we confirmed this assumption and found that all those factors have important effect on location choice of FDI.FDI from different countries of origin are of great differences when choosing location, but the same country of origin is an important effect while enterprises make the location choice in most cases.

Key words： FDI    Location Choice    Market Potential    the Same Country of Origin

Source: Finance & Trade Economics , No.9, 2014