This study analyzed the determinants of attracting foreign direct investment (FDI) by local governments. This study has distinction from other previous studies in that it employs sixteen provinces and regional governments as units of analysis rather than the nation. The analysis has used 7-years of panel data from 2009 to 2015, and a cross-sectional time-series FGLS regression was applied to the panel data analysis. The results of the analysis show that the locational factors, including free economic zone, industrial development promotion area, and scale of industry all have a significant effect on attracting foreign direct investment (FDI). Debt to budget ratio, as a financial factor, also has a positive effect while the rate of the net tax on production has negative effect. The residential area factor such as population size was analyzed to be more influential but as a negative effect. The main results of this study are thus as follows. First, it shows that the ratio of debt to budget has a positive effect on the decision to attract FDI and the impacts of the rate of the net tax on production and population size are negative in contrast to other previous studies that debt ratio is negative while population has a positive effect on attracting FDI. In conclusion, it is clear that the government policies are very important in determining FDI.