In 2003, China's absorption of foreign direct investment amounted to $ 53.505 billion, and becomes the country with the absorption of most foreign direct investment. Foreign direct investment in Hunan Province amounted to $101.835 million, accounting for 1.92%, ranking 12th in China, and in the inland provinces, it is less than Jiangxi and Hubei.
This study builds http://www.aleyasingroup.com/ygsslwdx/ on existing research experience, selects the location theory, theory of international direct investment and industrial organization theory as the basic theory for the research of location of foreign direct investment, and tries to inter-city and inter-provincial of these two spatial scales to analyze the location of foreign direct investment in Hunan Province by using the regression models and the method of gray correlation.
The results showed that the roles of the same location factors at different spatial scales on foreign direct investment are not entirely consistent. In terms of cities and states in Hunan Province, the economies of scale, market capacity, cumulative foreign direct investment, financing capacity, level of industrialization, globalization level and good geographical location have significant role in promoting growth for foreign direct investment; the technological development capacity, degree of development of information technology, labor costs, infrastructure conditions and level of urbanization are not obvious in promoting foreign direct investment growth. The province's investment environment can be divided into four levels: the first level is Changsha, Zhuzhou, Xiangtan, Yueyang and Chenzhou can be classified into the second level, Changde, Hengyang and Loudi are the third level, Yiyang, Yongzhou, Huaihua, Zhangjiajie and Shaoyang cre classified into the fourth level.
From the comparison of Hunan, Hubei and Jiangxi provinces, the financing capacity, economies of scale, market size, labor costs and geographical location are strong location factors, the level of urbanization, infrastructure conditions, industrial development, technological development, globalization and information level are neutral location factors, the cumulative foreign direct investment size is the weak location factor, in which the first two largely determine the location choice of foreign direct investment in the inland areas. The impact of Hubei's economies of scale, level of industrialization, infrastructure conditions on foreign direct investment is higher than in Hunan, the impact of the http://www.aleyasingroup.com/ygsslwdx/ financing capacity and infrastructure conditions in Jiangxi on foreign direct investment is slightly higher than in Hunan, making the two provinces in the absorption of foreign direct investment are higher than Hunan, and Hunan only in the market capacity and technological development has certain comparative advantages. Investment environment in Hunan is better than Hubei, and the improvement of investment environment in Hubei is slow, but faster in Jiangxi. In the new century, Jiangxi has been a leader in three provinces.#p#分頁標題#e#
Table of Contents
Chapter 1 Introduction 6
1.1 Research background & significance 6
1.2 Research aim & questions 7
1.3 Framework of dissertation 8
Chapter 2 Literature Review 9
2.1 Basic concepts of foreign direct investment location 9
2.2 Theoretical basis of foreign direct investment location 10
2.2.1 Location theory 10
2.2.2 Theory of international direct investment 12
2.2.3 Theory of industrial organization 16
2.3 Relationship between foreign direct investment location and investment environment 18
Chapter 3 Research Design 20
3.1 Choice of location factors 20
3.2 Research methods and data 24
3.2.1 Establishment of location analysis model 24
3.2.2 Investment environment index calculation and structural analysis 25
Chapter 4 Results and Analysis 26
4.1 Measurement test and analysis of empirical results 26
4.2 Measurement and analysis of investment environment 31
4.2.1 Measurement of investment environment 31
4.2.2 Analysis of the internal structure of the investment environment 34
4.3 Comparison analysis of three provinces 35
4.3.1 Development trend analysis 35
4.3.2 Choice of research methods 37
4.3.3 Analysis of location factors 39
Chapter 5 Conclusion and Recommendations 43
5.1 Main conclusions 43
5.2 Recommendations 44
Chapter 2 Literature Review
2.1 Basic concepts of foreign direct investment location
First, we give the basic concept of foreign direct investment. Foreign direct investment refers to the economic activity by the foreign enterprises to invest capital, technology, production equipment and plant, etc. in other country to obtain direct profits for the purpose (Kojima, 1978). This economic activity is the product of development and progress of productive forces, and is the result by the geographical division of labor that deepens the market economy and has become increasingly active in regional and international economic and human economic activities and organizational forms (Hsiao and Gastanaga, 2001). Foreign investors tend to find in one of the most favorable overseas production sites, and bring them into the global industrial chain of enterprise system.
Foreign direct investment location refers to the site for foreign direct investment enterprises in a particular area (non-investment enterprises home country) to the geographical space as the background, which is located by the relevant social, economic, social and economic activities (Friedman, Gerlowski and Silberman, 1992). This place is rich in content. Due to the non-uniformity of resource spatial distribution, the regional division of labor and socio-economic differences in space, it makes all places to be with different costs of space, markets, resources, technology, systems and other geographical conditions and different combinations of these conditions, and has different location advantages, allowing foreign direct investment can be carried out in some location. So in this sense, the foreign direct investment location objectively reflects in the geographical space constraints, foreign direct investment and related economic and social activities play a role in the opportunity, space and extent of the process, is a geo-spatial location identification socio-economic space, and given by the joint action of both foreign direct investment location factors, location selection and location decision-making differences.#p#分頁標題#e#
Thus, foreign direct investment location factors, location behavior, location decisions are more complex than the general location, it depends not only on business of their own financial strength and business strategy, and relates to the international market, investment target region's natural conditions, economic conditions, political and social conditions and other factors.
2.2 Theoretical basis of foreign direct investment location
Because foreign direct investment location studies are across multiple disciplines, and the study of history is not long, so far, a unified theory of foreign direct investment location is still under discussion. Academic study of foreign direct investment location is still based on the theory of other disciplines. There are more respected location theory, the theory of international direct investment and industrial organization theory.
Bain, J. S. (1959), Industrial Organization, Wiley, New York.
Buckley, P.J. and Casson, C. (1976), The Future of the Multinational Enterprise, Macmillan: London.
Caves, R.E. (1971) 'International Corporations: The Industrial Economics of Foreign Investment', Economica, 38, 149, 1-25.
Caves, R.E. (1996), Multinational enterprise and economic analysis, second edition, Cambridge University Press.
Chamberlin, E.H. (1933), The Theory of Monopolistic Competition, Cambridge, MA: Harvard University Press.
Chen, C.H. (1996) ‘Regional determinants of foreign direct investment in Mainland China’, Journal of Economic Studies, 23, 2, 18-30.
Cheng, L.K. and Kwan, Y.K. (2000) ‘What are the determinants of the location of foreign direct investment? The Chinese Experience’, Journal of International Economics, 51, 379-400.
Cheng, Y.C. (2005) 'China's Role in the Asian Economic Unification Process', Economic and Political Weekly, 40, 36, 3949.
China Statistical Yearbook 2004.
Clickman, N.J. and Wood, D.P. (1988) ‘The location of Foreign Direct Investment in the U. S. Patterns and Determinants’, International Region Science Review, 11.
Davidson, W.H. (1980) ‘The location of foreign direct investment activity: Country characteristics and experience effects’, Journal of International Business Studies, 11, 2, 9-22.
Dunning, J.H. (1973) ‘The determinants of international production’, Oxford Economic Papers, 25, 3, 289-336.
Dunning, J. H. (1977), Trade, location of economic activity and multinational enterprise: a search for an eclectic approach. In: Ohlon, B., Hesselborn, P., Wiskman, P. The international allocation of economic activity. London: Macmillan
Dunning, J.H. (1988), Explaining international production, Boston: Unwain Hyman.
Dunning, J.H. (1998) ‘Location and Multinational Enterprise: A Neglect Factor?’, Journal of International Business Studies, 29, 5-67.#p#分頁標題#e#
Friedman, J., Gerlowski, D.A. and Silberman, J. (1992) ‘What attracts foreign multinational corporations? Evidence from Branch plant location in the United States’, Journal of Regional Science, 32, 12, 403-418.
Fung, K.C, Lizaka, H., Lin, C. and Siu, A. (2002) ‘An Econometric Estimation of Locational Choices of Foreign Direct Investment: The Case of Hong Kong and U. S. Firms in China’, UC Santa Cruz Center for International Economics Working Paper No. 02-27.
Gong, H.M. (1995) ‘Spatial patterns of foreign direct investment in China's cities, 1980-1989’, Urban Geography, 16, 3, 189-209.
Hsiao, C. and Gastanaga, V. http://www.aleyasingroup.com/ygsslwdx/ (2001) ‘Factors affecting foreign direct investment with an analysis of the disparity between the Coastaland eastern Regions of China, Review of Pacic Basin Financial Markets and Policies’, World Scientic Publishing Company, 4, 479-493.
Hymer, S. (1960), On Multinational Corporations and Foreign Direct Investment. In J. H. Dunning (ed.), The Theory of Transnational Corporations. London: Routledge for the United Nations.
Kojima, K. (1978), Foreign direct investment: A Japanese model of multinational business operations, Croom Helm, London.
Krugman, P. (1992) 'Does the New Trade Theory Require a New Trade Policy?', The World Economy, 15, 4, 423-442.
Leung, C.K. (1990) ‘Locational Characteristics of Foreign Equity Joint Venture Investment in China, 1979-1985’, Professional Geographer, 42, 4, 403-421.
Li, G.P., Yang, K.Z., He, Q.C. and Sun, T.S. (2001) ‘A study on the mechanism and character of the industrial and spatial transference of FDI in China’, Chinese Geographical Science, 11, 1, 1-10.
Loree, D.W. and Guisinger, S. E. (1995) ‘Policy and non-policy determinants of US equity foreign direct investment’, Journal of International Business Studies, 26, 2, 281-299.
Losch, A. (1940), Economics of Location, Yale University Press, New Haven, Conn.
Luger, M. and Shetty, S. (1985), ‘Determinants of Foreign plant Start-ups in the United States: Lessons for policy-makers in the Southeast’, Vanderbit Journal of Transnational Law, 18, 223-245.
Mudambi, R. (1995) ‘The MNE investment location decision: Some empirical evidence’, Managerial and Decision Economics, 16, 3, 249-257.
Mudambi, R. and Navarra, P. (2003) ‘Political culture and foreign direct investment The case of Italy’, Economics of Governance, Springer-Verlag, 4, 7-56.
O'Kelly, M. and Bryan, D. (1996) 'Agricultural location theory: von Thunen's contribution to economic geography', Prog Hum Geogr, 20, 4, 457-475.
Porter, M.E. (1990), The competitive advantage of nations, The Free press, New York.
Pred, A. (1967), Behavior and location: foundations for a geographic and dynamic location theory, Lund: C.W.R. Cleerrup.#p#分頁標題#e#
Qu, T. and Green, M. B. (1977), Chinese foreign direct investment: A Sub-national perspective on location, Ashgate, Brookfield.
Reilly, W.J. (1929), Methods of the study of retail relationships, University of Texas Bulletin, no.2944.
Ritschl, H. (1927) 'Reine und historische Dynamik des Standortes der Erzeugungszweige’, Schmollers Jahrbuch, 51, 813-870.
Rosen, D.H. (1999), Behind the open door: Foreign Enterprises in the Chinese Marketplace, Institute for International Economics, Washington, DC, Council on Foreign Relations, New York.
Rugman, A.M. (1986) 'New theories of the multxnational enterprise: an assessment of Internalization theory', Bulletin of Economic Research, 38, 2, 101-118.
Stein, E.H. and Daude, C. (2001), Institutions, Integration, and the location of foreign direct investment, Inter-American Development Bank, Research Department, Washington, DC, Mimeo.
Vernon, R. (1966) ‘International investment and international trade in the product cycle’, Quarterly Journal of Economics, 80, 190-207.
Vernon, R. (1979) 'The product cycle hypothesis in a new international environment', Oxford Bulletin of Economics and Statistics, 41, 4, 255-267.
Weber, A. (1909), Alfred Weber’s Theory of the Location of Industries. Trans. by C. Friedrich, Chicago: University of Chicago Press, 1929.
Wei, S.J. (1997), Why is Corruption So Much More Taxing than Tax? Arbitrariness Kills, NBER Working Paper 6255. Cambridge, United States: National Bureau of Economic Research.
Wei, S.J. (2000) ‘How Taxing is Corruption to International Investors?’, Review of Economics and Statistics, 82, 1, 1-11.
Williamson, O.E. (1987) 'Transaction cost economics: The comparative contracting perspective', Journal of Economic Behavior & Organization, 8, 4, 617-625.
Wu, F.L. (1999) ‘Intrametropolitan FDI firm location in Guangzhou, China, A Poisson and negative binomial analysis’, Regional Science, 33, 535-555.
UKthesis provides an online writing service for all types of academic writing. Check out some of them and don't hesitate to place your order.