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Open AccessArticle

China’s Outward FDI in Indonesia: Spatial Patterns and Determinants

by 1,2, 1,2,3 and 1,2,*
1
The School of Geography, Nanjing Normal University, Nanjing 210023, China
2
The Jiangsu Center for Collaborative Innovation in Geographical Information Resource Development and Application, Nanjing 210023, China
3
The Inspectorate Banjar City Government, Banjar 46311, Indonesia
*
Author to whom correspondence should be addressed.
Sustainability 2018, 10(12), 4632; https://doi.org/10.3390/su10124632
Received: 15 November 2018 / Revised: 29 November 2018 / Accepted: 1 December 2018 / Published: 6 December 2018
China has gradually become an important world investor with the implementations of its “Going Global” and “Belt and Road” strategy initiatives. Indonesia is the world’s largest archipelagic country, and has the largest economy of the ASEAN (Association of Southeast Asian Nations). Therefore, Indonesia is an important node for China’s implementation of its “Belt and Road” initiative. However, the existing research results regarding China’s OFDI (Outward Foreign Direct Investment) in Indonesia have indicated that little focus has been placed on the distribution patterns and determinants at the provincial levels. In this study, spatial analysis and mathematical statistics methods were used to analyze the temporal and spatial pattern evolution characteristics of China’s OFDI in Indonesia for the period ranging from 2006 to 2016. Also, the mechanism of the pattern evolution was quantitatively identified. The results obtained in this research study indicated the following: (1) China’s OFDI in Indonesia was observed to be characterized by fluctuations in investment amounts and rising numbers of investment projects, also, the investment amounts and number of projects were spatially dispersed; (2) the overall spatial evolution of China’s OFDI in Indonesia was found to be characterized by certain patterns, such as “west higher than the east, and south higher than the north” patterns. Moreover, the direction of the investment gravity center was determined to be obviously distinct during different periods; (3) high-level investments were found to be focused in only a few provinces, meanwhile, the majority of the provinces continued to be in a low-level stable state of investment from China; (4) this study’s OLS (Ordinary Least Square) regression and step-wise regression models revealed that institutional factors, political relations, and human resources were the most important factors which had affected China’s OFDI in Indonesia during the study period. View Full-Text
Keywords: OFDI; spatial center of gravity; trend surface; spatial patterns; Indonesia OFDI; spatial center of gravity; trend surface; spatial patterns; Indonesia
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MDPI and ACS Style

Fu, Y.; Supriyadi, A.; Wang, T. China’s Outward FDI in Indonesia: Spatial Patterns and Determinants. Sustainability 2018, 10, 4632. https://doi.org/10.3390/su10124632

AMA Style

Fu Y, Supriyadi A, Wang T. China’s Outward FDI in Indonesia: Spatial Patterns and Determinants. Sustainability. 2018; 10(12):4632. https://doi.org/10.3390/su10124632

Chicago/Turabian Style

Fu, Yu; Supriyadi, Agus; Wang, Tao. 2018. "China’s Outward FDI in Indonesia: Spatial Patterns and Determinants" Sustainability 10, no. 12: 4632. https://doi.org/10.3390/su10124632

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