Spatial Mismatch and Determinants of Foreign and Domestic Information and Communication Technology Firms in Urban China

Studies on foreign direct investment locations in China have been conducted mainly at interregional and interprovincial scales, and little attention has been paid to the intraurban scale where location decisions of foreign firms can differ from domestic firms. This article explores the intraurban locations of information and communication technology (ICT) firms in Suzhou, a city experiencing rapid globalization. We have found that the distribution of ICT firms in Suzhou exhibits distinctive spatial patterns characterized by a geographically based, institutionally created spatial mismatch between foreign and domestic firms. Foreign firms are concentrated in national-level development zones—China–Singapore Suzhou Industrial Park in the east and Suzhou New and Hi-Tech District in the west—whereas domestic firms tend to agglomerate in the inner city and the provincial-level development zone in the north. Poisson and negative binomial analyses further reveal that the locations of foreign firms are strongly correlated to development zones, and the agglomeration economies derived from the stock of foreign investment rather than domestic firms. The case of Suzhou highlights the challenges that Chinese cities face in industrial upgrading and technological development through embedding transnational corporations.