Modelling Intrametropolitan Location of Foreign Investment Firms in a Chinese City

Abstract

Foreign direct investment (FDI) is now becoming a driving force for world-wide urban structuring. Very few studies have been made at the intrametropolitan scale of industrial location in post-socialist cities. Studies at a regional scale have generally emphasised the 'peculiar' nature of FDI and have resorted to the description of 'special factors' such as kinship ties and social networks to explain FDI location processes in contemporary urban China. With the aid of GIS techniques, this study geo-located FDI firms through their postal codes and measured the site characteristics through cross-referencing location factors presented in the coverage such as infrastructure and land use. This study used logistic regressions to examine how site attributes influence the popularity of a development site. The results suggest that intraurban FDI firm location can be explained by the location advantages prevailing at development sites, among which highway accessibility, the access to major high-ranking hotels and the status of the Economic and Technological Development Zone (ETDZ) are important determinants in addition to conventional location factors such as access to railway terminals, agglomeration economies and labour markets. The implications of FDI location for the urban spatial structure are profound. First, FDI has transformed the function of the city centre (for example, an emerging CBD). Secondly, the intrametropolitan distribution of FDI has triggered polycentric urban growth in Chinese cities.