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Location Selection and Location Decision of “Go out Exploring” of China's Enterprises

Pan Zhen;  
Based on the knowledge spillover perspective, using a database of Chinese subsidiaries invested in the United States during 2004~2012, this paper investigates location behavior of upstream Chinese OFDI and focuses on examining the impacts of agglomeration economies on location decision. The empirical results indicate that high country-of-origin and/or high local industrial agglomeration are among determinants of attracting Chinese subsidiaries, and the marginal effect of same country-of-origin activities is larger than that of local industrial activities. Subsidiaries with MA mode exhibit a weaker preference for country-of-origin agglomeration and a stronger preference for local industrial agglomeration than those with Greenfield mode do. Meanwhile, state-owned subsidiaries are less likely to seek country-of-origin agglomeration effect than private subsidiaries do. The above findings reveal the generalization, asymmetry and heterogeneity of agglomeration effect in location choice of Chinese OFDI.
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