An Empirical Study On Agglomeration Of FDI In China

China has got great achievements in attracting foreign direct investments after opening-up and reform. However, the distribution of FDI has characteristics of serious imbalance in China. Based on the previous research about the determinants of FDI, this paper divides the determinants into two kinds: the traditional determinants and the agglomeration effects determinants. This paper analyzes agglomeration effects from four aspects: manufacturing agglomeration, urban agglomeration, previous investments and technological activities. By estimating the effects of the determinants of FDI inflows in 28 Chinese regions from 1992 to 2004, this paper employs the panel data to establish the mathematical model. The conclusion is that compared with the traditional determinants the agglomeration effects take more important role. So the agglomeration effects are the core determinants for the allocation of FDI.