The Relationship between Resource, Leader, Process and Performance of Inward FDI: Based on Chinese Investment Promotion Agency

This paper examines how a host government’s investment promotion agency (IPA) can influence inward foreign direct investment (IFDI) performance. Existing studies have found evidence in positive relationships between the characteristics of leaders, resources of IPAs, and IFDI performance. This paper aims to answer the questions of how and what types of factors in IPA can influence the performance of IFDI. Though resources and characteristics of leaders are important factors of IPA, this paper also argues the importance of “process” of IPA on IFDI performance. Thus, this paper suggests that any country or city, which hopes to promote IFDI, should try to focus on the processes of their IPAs. The empirical results, which analyzed one hundred and six cities in China, showed that not only the characteristics of leaders and levels of resources but also the processes of IPA strongly influenced IFDI performance. Results showed the moderating effects of “evaluation processes” on the relationship between the antecedents (e.g., resource and leader) and IFDI performance.