Trade Costs and Location of Foreign Firms in China

Author/Editor:

International Monetary Fund

Publication Date:

March 1, 2005

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This study examines the determinants of entry into by foreign firms, using information on 515 Chinese industries at the provincial level during 1998-2001. The analysis, rooted in the new economic geography, focuses on market and supplier access within and outside the province of entry, as well as production and trade costs. The results indicate that market and supplier access are the most important factors affecting foreign entry. Access to markets and suppliers in the province of entry matters more than access to the rest of China, which is consistent with market fragmentation due to underdeveloped transport infrastructure and informal trade barriers.

Series:

Working Paper No. 05/55

Subject:

English

Publication Date:

March 1, 2005

ISBN/ISSN:

9781451860740/1018-5941

Stock No:

WPIEA2005055

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

25

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