Based on the new economic geography (NEG) theory, we analyzed the determinants of location choice for Japanese frozen food industry investments in East Asia, especially in 2000s. And we focused on effects of domestic market potential in the host country. In this paper, we divided domestic market potential into two types. First is the purchasing power such as PPP and population, and on the other hand, the purchasing infrastructure such as penetration rate of refrigerator. In the same way, we considered about consumption of frozen food in Japan. As a result of the conditional logistic model, we found that PPP, population and penetration rate of refrigerator affect the location choice for Japanese frozen food company, as well as traditional cost reduction factors such as wages, domestic market potential and promotion policies in the host country. Also, consumption of frozen food in Japan encourage Japanese FDI in East Asia.
JEL Classification: F23, R11, R30