Variables

Proxy

Variable type

Theoretical justification

Data source

FDI location choice

Annual FDI Stock in the host country

Dependent

MOFCOM (2015). Ministry of Commerce, China

Difference in political risk

Prisk: Composite variable , relative difference of political risk between host and home countries

Explanatory

Institutional force in the host and home countries

World Bank (2015), Worldwide Governance Indicator

Difference in economic freedom

Efreedom: Composite variable , relative difference of Economic Freedom between host and home countries

Explanatory

Institutional force in the host and home countries

The Heritage Foundation (2015), Index of Economic Freedom

Resource seeking intent

Resource seeking intent: the ratio of ore and metal exports to merchandise export in the host country

Explanatory

Strategic intent of invest firms

World Bank (2015), World Development Indicator 2015

GDP

GDP: GDP in the host country

Control

Market-seeking: Absolute market size

World Bank (2015), World Development Indicator 2015

GDP growth

GDPG: GDP growth rate in the host country

Control

Market-seeking: Market growth potential

World Bank (2015), World Development Indicator 2015

GDP per capital

GDPP: GDP per capita in the host country

Control

Market-seeking: Relative market size

World Bank (2015), World Development Indicator 2015

Population

Population of the host country

Control

Market-seeking

World Bank (2015), World Development Indicator 2015

Inflation

Annual inflation rate

Control

Macroeconomic stability

World Bank (2015), World Development Indicator 2015