Determinants of U.S. And Japanese Direct Investment in China

Posted: 18 Oct 2002

See all articles by K. C. Fung

K. C. Fung

University of California at Santa Cruz

Hitomi Iizaka

University of California at Santa Cruz

Stephen Parker

Asian Development Bank Institute

Abstract

This article examines the determinants of U.S. and Japanese direct investment in China using the regional data set from 1991 to 1997. The level of local GDP affects significantly the inflow of investment from both sources. Policy variables are also found to have significant positive effects on investment. Labor quality exerts a larger influence on Japanese investment than on U.S. investment, which may reflect the different structure for coordinating activities between U.S. and Japanese firms. The lagged wage variable is negatively related to direct investment from both sources.

JEL Classification: F2, O5

Suggested Citation

Fung, K.C. and Iizaka, Hitomi and Parker, Stephen, Determinants of U.S. And Japanese Direct Investment in China. Available at SSRN: https://ssrn.com/abstract=339421

K.C. Fung (Contact Author)

University of California at Santa Cruz ( email )

Santa Cruz, CA 95064
United States
831-459-3273 (Phone)
831-459-5900 (Fax)

Hitomi Iizaka

University of California at Santa Cruz ( email )

1156 High St
Santa Cruz, CA 95064
United States
408-476-6645 (Phone)

Stephen Parker

Asian Development Bank Institute

Kasumigaseki Building 8F
2-5, Kasumigaseki 3-chome
Tokyo 100-6008, Chiyoda-ku
Japan

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