A Regional Difference Research Of The Impact Of FDI Location Choice Factors On The Wage Spillover Effect

With the deepening of Reform and Opening up of China, as well as the rapid pace of globalization, the quality and growth speed of FDI invested in China has always hold a lead place in the world, and the amount of FDI has exceeded 990.3 billion dollars accumulatively until 2008. But it's distribution is highly unbalance, more than 80% of FDI concentrate in East region while quite a few of it enter into Middle and West region. Besides, many studies indicated that FDI also have an influence on the wage level of the host country. How the expression of wage spillover effect caused by FDI? Whether there is a firm relation between FDI location choice and wage regional difference? Is there any difference in the impact of FDI location choice factors on the wage spillover? And what is the mechanism of the effect? This article will study these issues and hope to get some solutions.At first, this article reviewed the development course and regional distribution of FDI in China, and the difference of regional wage level. Then chose the key factors of FDI location choice through component analysis, and divided into two categories: economic advantage location and traffic location factors. Based on these, this article constructed a theoretical model to estimate the impact of FDI location choice factors on the wage spillover, and use 1997-2009 panel date of 31 provinces and cities to make an empirical research through the method of GMM. The result indicated that FDI has caused an obvious spillover effect on real wage level, and the effect decreased from East to West. Besides, real GDP, material capital, road mileage, human resource stocks all made an obvious and different effect on wage spillover in East, Middle and West regions.Furthermore, this article discussed the mechanism of the effect, and found that there are four reasons contributed to the increasing of wage level: the flow of FDI and material capital which improve the labor productivity, the high wage of foreign invested companies, the competence of human resource, and the reform of wage distribution system pushed by FDI. While the reasons caused the different effects in East, Middle and West regions include: the uneven of FDI regional location, the difference of economic index, the diversity of human resource, industry agglomeration, technological level, and the diversity of FDI quality and industrial structure.At last, this article give policy suggestion about how to attract FDI and guide wage spillover effect rationally. It include: improve the structure of FDI, correctly orientate and introduce technology; accelerate the marketing reform of production elements; improve the quality of human resource, and guide the labor force to find employment in other areas, and improve the industrial associate effect, etc.