Foreign Direct Investment, Urban Sprawl, and Local State in China.

This paper explores the relationship between foreign direct investment (FDI) and urban sprawl in China. This paper argues that in China, the urban area tends to sprawl before real FDI inflow, due to Chinese local state's entrepreneurial behavior intended to attract more FDI in local competition. The research is both qualitative and quantitative. Qualitative part involves a case study of Kunshan.Quantitative data include a time series analysis of all 278 prefecture and above cities in China across 7 years (1996-2002). It is found that urban sprawl is a significant positive predictor of next year's actual FDI inflow. The result supports the argument of an advanced urban sprawl before FDI inflow. We also found regional effect, that is, urban sprawl can most effectively attract FDI in Coast North and Coastal South rather than Coastal East, the most attractive place for FDI in China; also it attracts FDI for the least favored place, the West. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]