Locational distribution and spatial diffusion of foreign direct investiments from Hongkong and Macao in mainland of China

Foreign direct investments (or FDIs) have been employed since the early 1980s and they have become more and more important in Chinese economic development. However, the roles of FDIs are very different between regions, partly due to the different locational preference of various source countries. Some facts show that FDIs from Hongkong - Macao indicate a strong locational preference. Therefore, this paper attempts to make an empirical research on the locational preference of Hongkong - Macao’s FDIs and their spatial diffusion under the support of statistical data with regression analysis. In this paper, three statistical models, including the special location model, the general location model and the spatial diffusion model, are created. The results show that this kind of analysis is successful. The major conclusions are as follows. (1) The optimum location for FDIs from Hongkong - Macao lies in the coastal area, especially Guangdong, Hainan, Jiangsu, Shandong, Fujian provinces. Besides, Hubei Province is also an important region. (2) The FDIs from Hongkong - Macao in China have diffused gradually from the coastal provinces to the inland regions, the northern and the metropolis and from the locations that had attracted a large number of investments to their vicinities since the 1990s. (3) The special location factors, such as the border effect, the unique social and kinship ties are the key factors determining the special locational distribution. (4) The general location and spatial diffusion of Hongkong - Macao’s FDIs are the results of interplay of several economic factors. They are the economic scale and advantage, the growth rate, the labor force and economic extrovert etc.