Research On Path Selection Of FDI In China's Service Based On Location Advantage Analysis Perspective

At present, the focus of global international direct investment has gradually shifted to service industry, which has become a new engine of international investment. With China's entry into the WTO and the further opening of service industry, the scale of FDI in China's service industry is growing rapidly. Therefore, it is urgent to study the operating activites of service TNC in China both theoretical and empirical in depth. This paper mainly discusses how foreign direct investment arranges the entry route selection, including choosing where to start new investment-location selection, through what kind of investment-Greenfield investment or Mergers and Acquisitions.This paper studys the location selection and the ways of investment selection on the base of International direct investment theory, in order to institute targeted strategic countermeasures, enlarge the attraction of FDI in China's service industry, promote the further developemnt of China's service industry.In the part of research on location selection of FDI in China's service industry, firstly, reviewed the relative theories of the location selection of FDI in China's service industry, then built the gravity model of FDI location selection, and made gravity model regression analysis on China's FDI location selection, which concluded that investment country's economic size, industrial structure, the investment economic development level differences and distances between investment country and China, and whether the investment country are APEC members or not affect the location selection of FDI in China.In the empirical analysis of the location selection of FDI in China's service industry, firstly, analyzed the influence factors of the location selection of FDI in service industry, then built index system of the location selection influence factors of FDI in China's service industry, and made empirical analysis on the locaiton selection of FDI in China's service industry. Through the empirical analysis, the paper concluded that, at present, non-institutional factors are the main advantages of China's service industry attracting FDI, such as FDI in China's second industry, China's GDP growth rate, China's per capita GDP and so on, due to the implementation of China's gradual opening up for service industry, the institutional factors are not enough to form locational advantages in China.In the part of research on the ways of investment selection of FDI in China's service industry, firstly, reviewed the relative theories of the ways of investment selection of FDI in China's service industry, then built the game model of the ways of investment selection of FDI. Through the Hotelling model, this paper analyzes the game cases bewteen the transnational corporations and the host country, and solves out the best way of the TNC access to the host country under different conditions.In the empirical analysis of the ways of investment selection of FDI in China's service industry, firstly, analyzed the features of the ways of investment of FDI in service industry and the investment status in China's service. Because the banking industry is the one of the industry that attracts FDI eariler, so this paper takes the banking industry as an example to analyze the ways of investment of FDI in China's service industry. Through the analysis, it concluded that the main ways of investment of FDI in China's service industry is sole proprietorship, with the further opening of China's particular service industry, the original joint venture or cooperation may turn to sole proprietorship or mergers and acquisitions in the future.Through the research on the selection of the location and the ways of investment, we found the rules and the influence factors of the pathe selection of FDI in China's service industry, so that the relevant regulatory bodies in China can have more profound understanding of the motives and influence factors of different strategic choices of FDI in China's service industrry, so as to achieve effective guidance and supervision on FDI in China's service industry. Meanwhile, the author wants to provide reference for the selection of the location and the ways of investment of China's foreign direct investment.