Locational Study of Foreign Enterprises in Beijing Based on an Ordered Probit Model

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  • 1. Department of Urban and Regional Planning, Peking University, Beijing 100871, China;
    2. School of Geography, Beijing Normal University, Beijing 100875, China;
    3. Institute of Geographic Sciences and Natural Resources Research, CAS, Beijing 100101, China;
    4. Graduate School of Chinese Academy of Sciences, Beijing 100101, China

Received date: 2004-06-25

  Revised date: 2004-11-19

  Online published: 2005-01-25

Supported by

National Natural Science Foundation of China, No.40271035; No.40401015

Abstract

Foreign direct investment has been a key driving force for China's urban development since the economic reform and opening up. Beijing is one of the favored locations by foreign investors. Foreign enterprises in Beijing have played a significant role in restructuring its production spaces and industrial compositions. Compared with their domestic counterparts, foreign enterprises are rational decision-makers and have more flexibility and freedom in choosing their locations. Governed by market forces, foreign enterprises are not randomly distributed within a city and their locational patterns are detectable. Based on data from the second census of basic units, this paper attempts to picture the spatial patterns of foreign enterprises in Beijing. Efforts are further made to investigate the locational behavior of foreign enterprises by incorporating firm-specific, industry-specific and location-specific factors in an ordered probit model (OPM). Empirical results show that foreign enterprises in manufacturing tend to agglomerate in the central city, but being diffused to the remote suburbs and having indeed promoted the industrial suburbanization in Beijing. Statistical results suggest that large and newly established manufacturing enterprises favor the suburbs while wholly foreign owned manufacturing enterprises and those producing multiple types of products tend to locate in the inner city. Industrial agglomeration pushes foreign manufacturers to the suburbs. Industry-specific factors play a crucial role in determining locations of foreign enterprises in Beijing. Those in resource and labor intensive sectors are inclined to locate in the suburbs while those in capital and technology intensive sectors are likely to favor the central city. The results have important policy implications for urban industrial restructuring in Beijing.

Cite this article

HE Canfei, LIANG Jinshe, ZHANG Hua . Locational Study of Foreign Enterprises in Beijing Based on an Ordered Probit Model[J]. Acta Geographica Sinica, 2005 , 60(1) : 122 -130 . DOI: 10.11821/xb200501014

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