Quality & Quantity

, Volume 44, Issue 2, pp 375–390 | Cite as

Location choice for direct foreign investment in new hospitals in China by using ANP and TOPSIS

  • Chin-Tsai LinEmail author
  • Meng-Chuan Tsai
Research Note


This study models location choices for foreign direct investments in new hospitals in China as an multi-criteria decision-making (MCDM) problem and designs develops a multidirectional relationship decision model combines the techniques of analytic network process (ANP) and technique for order performance based on similarity to the ideal solution (TOPSIS). This study discusses applying ANP to the relative weighting of multiple assessment criteria. The TOPSIS approach is employed to rank 15 counties without the Zhoushan of China’s Yangtze River Delta (YRD) region in terms of their overall performance under the decision model. To illustrate how the proposed approach is applied to the problem of selecting locations for new hospitals in China an empirical study of a real case is performed. This study demonstrates the effectiveness and feasibility of the proposed assessment procedure.


Location choice Foreign direct investment (FDI) Hospital China ANP TOPSIS 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Andrzej C.: Regional characteristics and the location of foreign firms within Poland. Appl. Econ. 37, 863–874 (2005)CrossRefGoogle Scholar
  2. Bakhuti S., Ajay T., Orvill B.A., Christopher J.L.M.: Access, utilization, quality, and effective coverage: An integrated conceptual framework and measurement strategy. Soc. Sci. Med. 61(1), 97–109 (2005)CrossRefGoogle Scholar
  3. Banga, R.: Impact of government policies and investment agreements on FDI inflows. 2003 Indian Council for Research on International Economic Relations: working Paper No.116. Cited 28 May 2005 (2003)
  4. Bell M.L., Hobbs B.F., Ellis H.: The use of multi-criteria decision-making methods in the integrated assessment of climate change: implications for IA practitioners. Soc. Econ. Plan. Sci. 37(4), 289–316 (2003)CrossRefGoogle Scholar
  5. Chang S.J., Park S.: Types of firms generating network externalities and MNCs’ co-location decisions. Strateg. Manage. J. 26(7), 595–615 (2005)CrossRefGoogle Scholar
  6. Cheng, S.: The role of labour cost in the location choices of Japanese investors in China. Pap. Reg. Sci. 85(1), 121–138 (2006)CrossRefGoogle Scholar
  7. Cheng E.W.L., Li H.: Analytic network process applied to project selection. J. Construction Eng. Manage. 131(4), 459–466 (2005)CrossRefGoogle Scholar
  8. Cheng S., Stough R.R.: Location decisions of Japanese new manufacturing plants in China: a discrete-choice analysis. Ann. Reg. Sci. 40(2), 369–387 (2006)CrossRefGoogle Scholar
  9. Deichann J., Karidis S., Sayek S.: Foreign direct investment in Turkey: regional determinants. Appl. Econ. 35, 1767–1778 (2003)CrossRefGoogle Scholar
  10. Dunning J.H.: Location and the multinational enterprise: a neglected factor? J. Int. Bus. Stud. 29(1), 45–66 (1998)CrossRefGoogle Scholar
  11. Eddie W.L., Cheng H.L., Ling Y.: The analytic network process (ANP) approach to location selection: a shopping mall illustration. Construction Innov. 5(2), 83–97 (2005)CrossRefGoogle Scholar
  12. Fischer J.H., Harrington J.E.: Product variety and firm agglomeration. RAND J. Econ. 27(2), 281–309 (1996)CrossRefGoogle Scholar
  13. Fu J: Institutions and investments: foreign direct investment in China during an era of reforms. University of Michigan Press, Ann Arbor (2000)Google Scholar
  14. Fung K.C., Iizaka H., Parker S.: Determinants of US and Japanese foreign direct investment in China. J. Comp. Econ. 30(3), 567–578 (2002)CrossRefGoogle Scholar
  15. Grant R.M.: Porter’s ‘competitive advantage of nations’: an assessment. Strateg. Manage. J. 12(7), 535–548 (1991)CrossRefGoogle Scholar
  16. He C.: Location of foreign manufacturing in China: agglomeration economies and country-of-origin effects. Pap. Reg. Sci. 82(3), 351–372 (2003)CrossRefGoogle Scholar
  17. Head, K., Ries, J.: Inter-city competition for foreign investment: static and dynamic effects of China’s incentive areas. J. Urban Econ. 40(1), 38–60 (1996)CrossRefGoogle Scholar
  18. Hsu, P.-F., Hsu, M.-G.: Optimizing the information outsourcing practices of primary care medical organizations using entropy and TOPSIS. Qual. Quant. doi: 10.1007/s11135-006-9040-8 (2006)
  19. Hwang C., Yoon K.: Multiple attribute decision making: methods and application. Springer, New York (1981)Google Scholar
  20. Meade L.M., Sarkis J.: Analyzing organizational project alternatives for agile manufacturing processes-An analytical network approach. Int. J. Prod. Res. 37(2), 241–261 (1999)CrossRefGoogle Scholar
  21. Partovi F.Y.: An analytic model for locating facilities strategically. Omega 34(1), 41–55 (2006)CrossRefGoogle Scholar
  22. Porter M.E.: The competitive advantage of nations. Free Press, New York (1990)Google Scholar
  23. Quaglia A., Vercelli M., Lillini R., Mugnoc E., Coebergh J.W. et al.: Socio-economic factors and health care system characteristics related to cancer survival in the elderly: A population-based analysis in 16 European countries (ELDCARE project). Crit. Rev. Oncol. Hematol. 54(2), 117–128 (2005)CrossRefGoogle Scholar
  24. Saaty T.L.: The analytic hierarchy process. McGraw Hill, New York (1980)Google Scholar
  25. Saaty T.L.: Decision making with dependence and feedback: the analytic network process. RWS Publications, Pittsburgh (1996)Google Scholar
  26. Shyur H.-J.: COTS evaluation using modified TOPSIS and ANP. Appl. Math. Comput. 177, 251–259 (2006)CrossRefGoogle Scholar
  27. Wolfslehner B., Vacik H., Lexer M.J.: Application of the analytic network process in multi-criteria analysis of sustainable forest management. For. Ecol. Manage. 207(1/2), 157–170 (2005)CrossRefGoogle Scholar
  28. Wu, C.-R., Lin, C.-T., Chen, H.-C.: Integrated environmental assessment of the location selection with fuzzy analytical network process. Qual. Quant. 41(1). Accepted: 14 September 2006 (forthcoming, 2007)Google Scholar
  29. Zhou C., Delios A., Yang J.G.: Locational determinants of Japanese foreign direct investment in China. Asia Pac. J. Manage. 19(1), 63–86 (2002)CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media B.V. 2008

Authors and Affiliations

  1. 1.Graduate School of ManagementMing Chuan UniversityTaipeiTaiwan, ROC

Personalised recommendations