Congestion costs and differences in the regional distribution of FDI in China

Congestion costs and differences in the regional distribution of FDI in China After implementing the reforms and opening up policies, China has continued to attract huge amount of foreign direct investments (FDI), but these FDI have a noticeably unbalanced spatial distribution. Why does FDI flow mostly into eastern China? Agglomeration economies and congestion costs play an important role in the spatial distribution of FDI in the country. Panel data was compiled for 287 prefectural-level cities and higher administrative units in China from 1999 to 2012 while controlling the effects of regional advantages, preferential policies, natural resources, infrastructure and other factors. Regression results verified that a high agglomeration of FDI in the eastern region of China is significantly attributed to the effects of congestion costs. Because of the particularities of the Chinese labour market and the monopolization of land market in cities, congestion costs lose the ability to regulate the spatial distribution of FDI and exert a reverse effect to distribute FDI more unevenly. In order to further open up inland regions and facilitate coordinated development between regions, the government must implement some preferential policies that encourage the flow of FDI into inland regions. Quality & Quantity Springer Journals

Congestion costs and differences in the regional distribution of FDI in China

Loading next page...
Springer Netherlands
Copyright © 2016 by Springer Science+Business Media Dordrecht
Social Sciences; Methodology of the Social Sciences; Social Sciences, general
Publisher site
See Article on Publisher Site


You’re reading a free preview. Subscribe to read the entire article.

DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

Monthly Plan

  • Read unlimited articles
  • Personalized recommendations
  • No expiration
  • Print 20 pages per month
  • 20% off on PDF purchases
  • Organize your research
  • Get updates on your journals and topic searches


Start Free Trial

14-day Free Trial

Best Deal — 39% off

Annual Plan

  • All the features of the Professional Plan, but for 39% off!
  • Billed annually
  • No expiration
  • For the normal price of 10 articles elsewhere, you get one full year of unlimited access to articles.



billed annually
Start Free Trial

14-day Free Trial