Since the reforming and opening up in China, many manufacturing multinational corporations (MTCs) have been attracted to invest in China’s eastern coastal regions. There are agglomeration characteristics of manufacturing FDI presented in the eastern region of China. The purpose of research in this paper is to study the relationship between industrial agglomeration and FDI in China. We analyze that industrial agglomeration has impacted manufacturing FDI through effects of scale economy, industrial correlation, transaction cost, and innovation. At last, relevant policies and measures for industrial agglomeration are put forward to promote the development of FDI in China.
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