Japanese Companies In China Direct Investment Location Choice

Foreign investment has already become the important means of internationalization and is realized mainly by multinational corporations. When the multinational corporations make investment decisions, the choosing of target country and the specific investment locations are the primary things. The regional conditions of investment location have promoted influence on the investment industry.China and Japan are the neighboring countries that separated only by a stripe of water and have long historical connection. From the 1980s, Japanese foreign direct investment began come to China with several ups and downs but developed very fast. In 2007, the foreign direct investment from Japan took the first place in China. When comes to the location decision problem, we will find most Japanese companies investment concentrate in the east coastal area including Bohai Gulf, Yangzi River Delta and Pearl River Delta, much more tan those in the middle and west of China. Moreover, Industrial distribution is that the concentration of manufacturing and the non-manufacturing are higher in eastern than that in central and west area. The economy of eastern the downstream of Yangzi River, Bohai Gulf and Southern area, which are close to Japan, develop very fast. The endowment is different in these areas, so the better one can obtain huge advantage in the Japanese investment.This paper mainly investigate the city distribution characteristic of the FDI from Japan, and analyzes the main factors including market size, labor force cost, infrastructure and the agglomeration which decide the location of the Japanese direct investment in China by using the panel data model. Specifically, the infrastructure and the agglomeration have significantly influence at the location decision of Japanese direct investment in China. In addition, combined with the investment motivation, this paper analyzes different industry location by using correspondence analysis and correlation analysis. Thus the paper will study on the mechanism of the location of Japanese investment in China.The thesis is composed of six chapters. Chapter One starts with an introduction of the background, purpose and innovation of the study. Chapter Two is a review on previous research thus provides the thesis with a theoretical and practical foundation. Chapter Three describes systematically Japanese FDI's evolution process and present situation and also summarizes its evolution features from the perspective of foreign investment total, industry and location. Chapter Four analyzes the factors influent the Japanese foreign investment in China based on the city distribution. Chapter Five connected the industry advantage with the location advantage by the investing motivation. At the end, Chapter Six summarizes the main conclusion and the policy implication.