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A city-level analysis of the distribution of FDI within China
Journal of Chinese Economic and Foreign Trade Studies
  • Lai Sheung, Suwina CHENG, Lingnan University, Hong Kong
  • Zhenpin, Kenny LIN, Lingnan University, Hong Kong
  • Richard Stanley SIMMONS, Lingnan University, Hong Kong
Document Type
Journal article
Publication Date
Emerald Publishing Limited
  • China,
  • FDI,
  • Government effectiveness,
  • City level,
  • Investment climate,
  • F2,
  • P2

Purpose: The study aims to examine whether city-level investment climate, local government effectiveness and corporate income tax rates influence the spatial distribution of foreign direct investment (FDI) across cities in China.

Design/methodology/approach: The study uses regression analysis using city-level data sets.

Findings: The study finds that while city-level investment climate and effective local government influence the spatial distribution of FDI across Chinese cities, city-level tax rates have no such influence.

Practical implications: The results have implications for the design of policies aimed at enhancing FDI flows into emerging countries.

Originality/value: To date, few studies have investigated the investment location choice at the city level in a single country. The study contributes to the literature by examining the role of government in such investment decisions. It also adds to the previously limited research examining the role of investment climate at the micro level.

Funding Information
The authors gratefully acknowledge financial assistance through a Lingnan University Business Faculty Research Grant.
Publisher Statement
Copyright © Emerald Publishing Limited 2017. Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Citation Information
Cheng, S., Lin, K. & Simmons, R. (2017). A city-level analysis of the distribution of FDI within China. Journal of Chinese Economic and Foreign Trade Studies, 10(1), 2-18. doi: 10.1108/JCEFTS-01-2016-0002