A different version of the article was presented at 1999 Western Economic Association International meeting at SAn Diego.I am grateful to James Dietz, coeditor of the jorrnal, and two referees for their helpful comments and suggestions. The usual caveat applies.
WHAT ATTRACTS FOREIGN MULTINATIONAL CORPORATIONS TO CHINA?
Article first published online: 18 JUL 2008
Contemporary Economic Policy
Volume 19, Issue 3, pages 336–346, July 2001
How to Cite
Zhang, K. H. (2001), WHAT ATTRACTS FOREIGN MULTINATIONAL CORPORATIONS TO CHINA?. Contemporary Economic Policy, 19: 336–346. doi: 10.1093/cep/19.3.336
- Issue published online: 18 JUL 2008
- Article first published online: 18 JUL 2008
After adopting the open-door policy, China experienced a boom of inward foreign direct investment (FDI) by multinational corporations. This article attempts to assess effects of location characteristics and government policies on FDI flows during the period 1987–98. A model of FDI determinants is specified and estimated with cross-section and panel data. The estimates indicate that China's huge market size, liberalized FDI regime, and improving infrastructure are attractive to multinationals. The regional distribution of FDI within China is influenced largely by FDI incentives and historical-cultural links with foreign investors, along with other location factors.