Location choice of multinational enterprises in China: Comparison between Japan and Taiwan


  • This research was funded by the Taiwan Interchange Association. We would like to thank the Taiwan Interchange Association for giving us the opportunity to conduct this study. We thank Akiko Kudo for arranging for us to use the Global Reference Solution database. Also, we would like to thank three anonymous referees for their valuable comments and suggestions. The opinions expressed in this paper are the sole responsibility of the authors.


This paper explores the location choice of multinational enterprises (MNEs) in China, shedding special light on the role of agglomeration of same-nationality firms. We examine how this role differs according to firms' productivity. Furthermore, we compare the location choice of Japanese and Taiwanese MNEs in China, taking into consideration that Taiwanese MNEs experience less uncertainty in investing in China due to Taiwan's linguistic and cultural advantages. When considering firms' productivity, we find that less productive Japanese firms prefer to locate close to larger same-nationality agglomerations while there are no differences in location choices in the case of Taiwanese firms.


Este trabajo explora la elección de localización de empresas multinacionales (EMN) en China, para esclarecer en especial el papel de la aglomeración de empresas con la misma nacionalidad. Se examina cómo varía este papel en función de la productividad de las empresas. Además, se compara la elección de localización de las EMN japonesas y taiwanesas en China, teniendo en cuenta que las EMN taiwanesas gozan de menor incertidumbre al invertir en China debido a las ventajas lingüísticas y culturales de Taiwan. Respecto a la productividad, las empresas japonesas menos productivas prefieren ubicarse cerca de grandes aglomeraciones de la misma nacionalidad, mientras que no hay diferencias en las decisiones de localización en el caso de las empresas taiwanesas.