Country-of-Origin Agglomeration in the Economy:Evidence from the Locations of FDI Firms
Current research on the causes of economic agglomeration largely focuses on local factors,often overlooking external factors such as the origin of foreign investment.This study investigates whether external factors impact economic agglomeration and examines the country-specific agglomeration of Foreign Direct Investment(FDI)within the same city.Motivated by reflections on foreign investment's location strategies and spatial distribution patterns in host countries amid global economic integration,this paper uses geographic coordinates data of newly registered foreign-funded enterprises in China from 1992 to 2018 to explore these questions.Empirical analysis confirms the significant influence of the source country on the clustering of new foreign investments within cities,and the tendency of new foreign-funded enterprises to locate closer to existing investments from the same source country in intra-city China.This conclusion still holds in a series of robustness tests.The study also finds a phenomenon of neighboring-country agglomeration of foreign-funded enterprises within cities.Heterogeneity analysis suggests that country-specific agglomeration is more pronounced in cities with a lower level of national development,smaller investment sizes,and investments in eastern China.Mechanism analysis finds that country-specific effects influence foreign investment locations by mitigating competitive disadvantages,fostering social networks,and creating legitimacy spillovers.This paper contributes to the existing literature in the following aspects.First,this paper extends the analysis of country-specific FDI agglomeration to the firm level within cities,offering a deeper understanding of FDI agglomeration.Second,this paper expands the concept of country-specific agglomeration by introducing the possibility of spatial agglomeration of FDI from neighboring countries,enriching the FDI agglomeration literature.Third,this paper demonstrates that country-specific agglomeration exists independently of industry-specific agglomeration.While earlier studies often link the two phenomena,concluding that country-specific agglomeration derives from industry-specific agglomeration based on the judgment of local samples,this paper finds that industry factors may affect foreign investment from neighboring countries'agglomeration to a certain extent,but the homeland country agglomeration persists independently after removing the industry correlation as much as possible.This distinction highlights the independence of country-specific agglomeration of foreign investment,which is a useful supplement to the existing research and has clear policy implications.In the future,we will continue to conduct more in-depth research on the spatial agglomeration of foreign investment in the service sector and its broader economic impacts.
Foreign Direct InvestmentLocation ChoiceCountry-of-Origin Agglomeration
NETL
NSTL
万方数据
