Author/Authors :
Tokunaga, Suminori University of Tsukuba - Graduate School of Lofe and Environmental Sciences - Department of Appropriate Technology and Science for Sustainable Development, Japan , Jin, Shaosheng University of Tsukuba - Graduate School of Lofe and Environmental Sciences - Department of Appropriate Technology and Science for Sustainable Development, Japan
Abstract :
This article examines the hypothesis related to the role of agglomeration effects on location choice behavior of Japanese electronics firms in China. According to Krugman (1991), Fujita and Krugman (1995), Fujita, Krugman, and Venables (1999), agglomeration effects play an important role on location choice behavior. Using the data of Cyugoku Sinsyutsu Kigyou Ichiran 2003 - 2004 (Japanese enterprises investment in China 2003 - 2004), we estimate a location choice model of Japanese electronics firms using market potential, industrial agglomeration, and traditional factors such as wage, infrastructure, and policy incentives as explanatory variables. The result of this estimation shows that the agglomeration effects play an important role on location choice behavior of the Japanese electronics firms in China.
