Regional competitiveness for attracting and retaining foreign direct investment: a configurational analysis of Chinese provinces

ABSTRACT

This study examines the entry and exit of multinational enterprises (MNEs) across regions in China. It analyses the strategic entry and exit of MNEs in 31 Chinese provinces during the period 2001–07. The fuzzy-set qualitative comparative analysis (fsQCA) reveals multiple regional competitiveness profiles, as configurations of economic and institutional conditions, which are associated with a large scale of MNE entries and/or exits. It is found that while MNEs tend to exit regions with deficiencies in economic conditions, they are attracted to regions with favourable economic conditions and low state intervention, which also results in heightened market competition leading to the restructuring of foreign investors.

KEYWORDS:

• regional competitiveness
• foreign market entry strategy
• multinational enterprises
• China
• state capitalism
• competitiveness diamond

JEL:

• F23

ACKNOWLEDGEMENTS

The authors thank the special issue guest editors and two anonymous reviewers for their constructive comments on previous versions of this paper.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

ORCID

Lin Cui http://orcid.org/0000-0002-9818-4543

Di Fan http://orcid.org/0000-0003-2737-4136

Additional information

Funding

The first three authors received funding support from the National Natural Science Foundation of China [grant number 71872043].