Research on the recommendation framework of foreign enterprises from the perspective of multidimensional proximity

TL;DR

This paper develops a multidimensional proximity-based recommendation framework to identify high-quality foreign-funded enterprises suitable for local investment, aiding local governments in targeted economic development strategies.

Contribution

It introduces a novel multidimensional proximity approach combined with multi-criteria decision analysis to evaluate and rank foreign enterprises for investment suitability.

Findings

Framework effectively identifies high-quality foreign-funded enterprises.

Case study validates the methodology in a Beijing district.

Framework assists local governments in targeted investment decisions.

Abstract

As global economic integration progresses, foreign-funded enterprises play an increasingly crucial role in fostering local economic growth and enhancing industrial development. However, there are not many researches to deal with this aspect in recent years. This study utilizes the multidimensional proximity theory to thoroughly examine the criteria for selecting high-quality foreign-funded companies that are likely to invest in and establish factories in accordance with local conditions during the investment attraction process.First, this study leverages databases such as Wind and Osiris, along with government policy documents, to investigate foreign-funded enterprises and establish a high-quality database. Second, using a two-step method, enterprises aligned with local industrial strategies are identified. Third, a detailed analysis is conducted on key metrics, including industry revenue, concentration (measured by the Herfindahl-Hirschman Index), and geographical distance (calculated using the Haversine formula). Finally, a multi-criteria decision analysis ranks the top five companies as the most suitable candidates for local investment, with the methodology validated through a case study in a district of Beijing.The example results show that the established framework helps local governments identify high-quality foreign-funded enterprises.