Mapping Amenity and Urban Competitiveness to Attract FDI

In contemporary world, city is powering regional and national economic growth. Urban competitiveness depicts a city’s ability to attract investments as well as enhancing quality of life for residents. FDI firms are with highest mobility worldwide and can bring in capitals, jobs and knowledge; therefore, city’s ability to attract FDI works as a proxy for measuring overall urban competitiveness in this study. Based on literature review, it is determined by a combination of traditional “hard” qualities and “soft” amenities, the former contains productivity, infrastructure and economic structure, and the latter refers to cultural and entertainment environment. This study aims at explaining the “soft” amenity factors’ impact on city’s FDI competitiveness. The research is conducted on two levels. The general study analyses at city level by using a sample of 150 global cities from Global Urban Competitiveness Report (GUCR) and modelled through a conventional Ordinary Least Square (OLS) regression. The specific study targets on the neighbourhood level in city of Johannesburg and London. By using detailed geographical information, local Geographical Weighted Regression (GWR) estimations are deployed to capture the spatial heterogeneity. Research confirmed the positive relationship between urban “soft” amenities and FDI competitiveness; nevertheless, traditional “hard” qualities are leading factors in influencing FDI locations. In the neighborhood level analysis, the spatial unevenness of FDI and amenities leads to non-stationary impact. In Johannesburg, both FDI and amenities are clustered in the northern privileged districts, and recreational amenities are found to have significant positive effects on FDI density in these areas. In contrast, London has a concentration of FDI and amenities in the city center, and likewise, amenities have higher impact on FDI density in core than that in periphery. Based on above findings, with comparison to London, this study proposed a balanced economic development strategy for city of Johannesburg. Firstly, the city should establish the strategy to attract investments and accomplish economic growth goals. Secondly, spatial inequalities issue, especially the amenity disparity between northern and southern neighborhoods, should be addressed to achieve sustainable development. Thirdly, cultural amenities, such as educational institutions, museums and art centers, should be introduced to facilitate high quality of life, and to attract and retain high-quality labor and investment in Johannesburg.