Chapter 2. Origin effects, spatial dynamics, and redistribution of foreign direct investment in Guangdong, China
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Karen Zhi-hua Xu
Abstract
Based on a panel regression analysis and interviews with 70 foreigninvested enterprises (FIEs) in 2009, this paper compares the spatial dynamics and redistribution of foreign direct investment (FDI) from Hong Kong, Taiwan, Japan, and the US in Guangdong Province. We found that FDI in Guangdong tends to favour cities closer to Hong Kong, with lower wage rates, better market potential, and more preferential policies and to follow the agglomeration of FDI from the same origin. The diverse home-based characteristics have resulted in the varied pathways of spatial redistribution of FDI. Hong Kong FIEs have been searching for lower-cost regions given the rise of production costs and tightened environmental regulations. In contrast, the redistribution of FIEs from Japan and Taiwan are more sensitive to their home-based business linkages, whereas Japanese and the US FIEs tend to value access to the domestic market and to expand in large cities outside Guangdong. In all, this study suggests that FDI is not a homogenous entity. An investment source approach of its distribution strategies is more comprehensive in analysing their location choices. Both quantitative and qualitative evidence have reiterated the significance of inter-firm networks and agglomeration with salient origin effects. This study also helps in designing policies and practices that are tailored to investment from different sources.
Abstract
Based on a panel regression analysis and interviews with 70 foreigninvested enterprises (FIEs) in 2009, this paper compares the spatial dynamics and redistribution of foreign direct investment (FDI) from Hong Kong, Taiwan, Japan, and the US in Guangdong Province. We found that FDI in Guangdong tends to favour cities closer to Hong Kong, with lower wage rates, better market potential, and more preferential policies and to follow the agglomeration of FDI from the same origin. The diverse home-based characteristics have resulted in the varied pathways of spatial redistribution of FDI. Hong Kong FIEs have been searching for lower-cost regions given the rise of production costs and tightened environmental regulations. In contrast, the redistribution of FIEs from Japan and Taiwan are more sensitive to their home-based business linkages, whereas Japanese and the US FIEs tend to value access to the domestic market and to expand in large cities outside Guangdong. In all, this study suggests that FDI is not a homogenous entity. An investment source approach of its distribution strategies is more comprehensive in analysing their location choices. Both quantitative and qualitative evidence have reiterated the significance of inter-firm networks and agglomeration with salient origin effects. This study also helps in designing policies and practices that are tailored to investment from different sources.
Chapters in this book
- Frontmatter I
- Acknowledgements V
- Contents VII
- List of Figures IX
- List of Tables XI
- Chapter 1. China and the global era: From globalisation to everyday life 1
- Chapter 2. Origin effects, spatial dynamics, and redistribution of foreign direct investment in Guangdong, China 21
- Chapter 3. Broken wing: Affective geographies of China’s state-owned enterprise reform 45
- Chapter 4. Neoliberalisation and community development: Comparing community development services in Hong Kong and Beijing 65
- Chapter 5. A review of the effective features of Facebook in social media-based interventions to increase adolescents’ physical activity 89
- Chapter 6. Gender and social capital: The case of a deprived urban community in Hong Kong 103
- Chapter 7. Framing migrant domestic workers inside transnational businesses: A case study of Bangladeshi women travelling to Hong Kong, and their Hong Kong-based employment agencies 135
- Chapter 8. Aurora College for Women in Shanghai, 1937–1951 155
- Chapter 9. The local mutation of professional academic organisations and its fragmentising effect under academic globalisation: Evidence from modern China and Japan 173
- Chapter 10. German Romantic ideals and the revival of traditional Chinese culture in early twentieth century China 191
- Chapter 11. Urban resilience in China: Government action and community response 207
- Index 225
Chapters in this book
- Frontmatter I
- Acknowledgements V
- Contents VII
- List of Figures IX
- List of Tables XI
- Chapter 1. China and the global era: From globalisation to everyday life 1
- Chapter 2. Origin effects, spatial dynamics, and redistribution of foreign direct investment in Guangdong, China 21
- Chapter 3. Broken wing: Affective geographies of China’s state-owned enterprise reform 45
- Chapter 4. Neoliberalisation and community development: Comparing community development services in Hong Kong and Beijing 65
- Chapter 5. A review of the effective features of Facebook in social media-based interventions to increase adolescents’ physical activity 89
- Chapter 6. Gender and social capital: The case of a deprived urban community in Hong Kong 103
- Chapter 7. Framing migrant domestic workers inside transnational businesses: A case study of Bangladeshi women travelling to Hong Kong, and their Hong Kong-based employment agencies 135
- Chapter 8. Aurora College for Women in Shanghai, 1937–1951 155
- Chapter 9. The local mutation of professional academic organisations and its fragmentising effect under academic globalisation: Evidence from modern China and Japan 173
- Chapter 10. German Romantic ideals and the revival of traditional Chinese culture in early twentieth century China 191
- Chapter 11. Urban resilience in China: Government action and community response 207
- Index 225
