Location decisions of Japanese new manufacturing plants in China: a discrete-choice analysis

This paper adopts a conditional logit model to empirically examine the location choices of Japanese greenfield manufacturing foreign direct investment among Chinese provinces. It is hypothesized that its location decisions in China would be determined by the provinces' market sizes, infrastructure capacities, labor, land, and energy costs, agglomeration effects, labor quality, and policy incentives. A Hausman-McFadden test is conducted to test whether the independence from irrelevant alternatives assumption of the conditional logit model is violated.