Firm-specific effects on location decisions of foreign direct investment in China's logistics industry

HONG J. (2007) Firm-specific effects on location decisions of foreign direct investment in China's logistics industry, Regional Studies 41, 673-683. This paper uses conditional logit models to investigate firms-specific effects on location decisions of foreign direct investment in China's logistics industry. Based on a recent census database, the empirical results indicate that the importance of some location factors varies with firm characteristics. Small logistics firms are more sensitive to labour cost than large companies. Compared with independent firms, branch companies are less responsive to local market demand and labour factors. Wholly owned foreign firms prefer cities with cheap labour; while joint ventures put more emphasis on local market demand. Investors from Hong Kong, Macao and Taiwan value local market size, while those from foreign countries emphasize cheap labour and convenient airway transport. Location determinants also vary over time and differ across sectors. Implications for researchers and policy-makers are also given.