Exploring the significance of domestic investment for foreign direct investment in China: A city-network approach. (September 2019)

• Record Type: Journal Article
• Authors: Shi, Shuai; Wall, Ronald; Pain, Kathy
• Is Part Of: Urban studies. Volume 56:Number 12(2019:Sep.)
• Page Start: 2447
• Page End: 2464
• Publication Date: 2019-09
• Subjects: China -- cities -- core–periphery -- cross-territorial flow networks -- Domestic Investment -- Foreign Direct Investment; 中国 -- 城市 -- 核心 - 边缘 -- 跨地域流动网络 -- 国内投资 -- 外国直接投资; Cities and towns -- Periodicals; City planning -- Periodicals; 307.1216
• DOI: 10.1177/0042098018795977
• Languages: English
• ISSNs: 0042-0980

Abstract

This article uses a network approach and a negative binomial regression model (NBRM) to shed light on the association between Domestic Investment (DI) and Foreign Direct Investment (FDI) in interlinking Chinese cities in a space of flows. The empirical analysis is based on 2743 FDI and 9315 DI projects covering 77 Chinese cities. We address the question of what the association is between DI network measures and city attractiveness for FDI, and if the geographic distance of DI matters. While the physical distance of DI activity is found to have a negative association with FDI, city functional proximity and structural position in the DI network are found to have a positive association. We conclude that strategic policies to stimulate cross-territorial economic ties between Chinese cities should be advantageous in attracting inward foreign investment.