Date of Award

1-1-2010

Document Type

Campus Access Thesis

Department

Moore School of Business

Sub-Department

Economics

First Advisor

Douglas Woodward

Abstract

It has been more than 30 years since the Reform and Opening-up Policy put into practice in China. With amazing performance of FDI attraction as well as the development of local economics and investment environment, FDI in China rose substantially since 1978. However, in the recent decade, China is facing challenge of inter-regional industry transfer and upgrade while the coastal relatively developed regions are gradually losing their cost advantage.

More and more attentions are paid to the location determinants of FDI. Extensive literatures highlight the importance of institutional factor, market potential, agglomeration effects and infrastructure capacity and so on. Based on the traditional location theory of FDI, integrating the theories of competitive advantage and comparative advantage, this paper assumes cost factors still be prior concerns to FDI in China and tested the variation in responses to the cost changes based on the characteristics of foreign enterprises, namely the different industrial sector engaged in and different sizes.

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