An Empirical Study On The Regional Determinants Of FDI In China

Since adopting reform and open-door policy, foreign direct investment in China has increased in a fairly high speed, and is playing an important role for China's economic takeoff. Moreover, the central authorities have gradually promulgated in recent years with the Great Development of the West, revitalizing old industrial bases in northeast and central China strategy. More and more foreign direct investors began to pay attention to China's western region development. But since China implemented a gradient opening pattern, the geographical differences and the original conditions, such as different economic base, coupled with the regional tilt of preferential policies for foreign investors, regional distribution of foreign capital showing a low-East West spatial pattern. Foreign direct investment in the eastern and western regions of the uneven distribution will further lead to the east and the west differences in the level of economic development, which would greatly hinder Chinese Economy to develop sustainable, healthy and harmonious. Therefore, grasping the qualitative and quantitative impacts of FDI location factors and their impacts on the distribution of the degree and direction, and exploring suitable policy for China's national conditions as well as the regional situation to attract foreign capital, setting up the scientific evaluation criteria and guidance for China's regional development, maximizing the regional characteristics and advantages, become the most important issue in the deepening of China's opening up and exchanges, and promotion of coordinated development of regional economy .Firstly reviewing of the existing literature, which respectively concerned about the international direct investment theory and the District of theoretical research on the progress, and then based on this, this article introduces domestic and foreign scholars in recent years for foreign direct investment in the areas of distribution. Secondly an Empirical Study of Factors Affecting, based on China's actual situation, describes the foreign direct investment in China's current situation and analyzes its geographical unbalanced distribution again, Besides that using dynamic panel GMM estimation methods to research in a more comprehensive perspective on the impact of China's foreign direct investment location Distribution of the Empirical Research on factors; Finally, the analysis of the current China's use of foreign direct investment and the problems that exist in the corresponding policy recommendations, in a bid to the use of science to develop strategies to provide theoretical support of foreign investment and policy guidance.This paper is trying to use the innovation GMM means to overcome dynamic panel data model to explain the endogenous variable. The estimated GMM model not only can be avoided Heteroscedasticity and self-related interference, and does not need the normal distribution assumption, regression results higher credibility and thus more practical significance. In order to evaluate the results and the estimated delay the stability of the order, the paper also on the model of a smooth panel residual test to confirm the estimated GMM is not the result of false regression.