| Abstract: | Using data on investments in China from Fortune Global 500 multinational corporations (MNCs) based in Japan, the United States, and European Union over a three-decade period, the authors document the gradual expansion of MNCs in China both functionally and geographically. Statistical analysis suggests the existence of significant intra-firm clustering as a result of sequential investments, as well as country-of-origin agglomeration in the case of MNCs from Japan. Disaggregated analysis, however, reveals that functional and cross-functional mutual avoidance (e.g., intra- and inter-firm competition) in the location of MNC subsidiary firms tends to mitigate country-of-origin agglomeration effects. Journal of Economic Literature, Classification Numbers: D200, D800, G320, L200. 5 tables, 5 figures, 68 references. |
