Place, space, and foreign direct investment into peripheral cities

Conor McDonald, Peter J. Buckley, Hinrich Voss*, Adam R. Cross, Liang Chen

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

27 Citations (Scopus)

Abstract

Perspectives drawn from the economic geography literature are increasingly used to generate insights into locational issues in international business. In this paper, we seek to integrate these literatures further by investigating the locational determinants of foreign direct investment (FDI) into peripheral cities within an emerging economy. Peripheral cities in emerging economies are attracting a growing proportion of global FDI flows, but the international business literature lacks a framework for understanding subnational determinants of FDI, particularly into non-core locations. We draw on the core-periphery model to build and test theory on how spatial interdependencies between subnational locations impact on the distribution of FDI inflows into a large and heterogeneous country China. Our results show that whilst peripheral cities tend to have a negative effect on FDI, this effect is positively moderated by proximity to core cities. The results highlight the importance of considering interactions between place and space when investigating locational issues in international business.

Original languageEnglish
Pages (from-to)803-813
Number of pages11
JournalInternational Business Review
Volume27
Issue number4
DOIs
Publication statusPublished - Aug 2018

Keywords

  • China
  • Cities
  • Core-periphery
  • Distance
  • FDI

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