Industrial And Locational Discrepancies: A Study On International Transfer Of Services

Services have become the most important part of the international industry transfer since 1990s. The transfer of services which can be done through FDI and through offshore outsourcing has industrial and locational discrepancies. Most FDI of services has been invested to the minority of the service industries and to a few regions. It seems that the international transfer of services prefers some industries and some regions. To find out the reason why such industries and regions are preferred during the course of the international transfer of services, the factors which may determine the level of the local FDI of services are investigated.On the base of the theories relative to FDI and the former empirical studies, the factors which are considered to affect how much input FDI of services a region will get are selected out for the our investigation in this paper. After thoroughly analyzing the characters of the industrial and locational discrepancy of the international transfer of services, the selected factors are used in our empirical study. First, 6 propositions are presented according to the selected factors. Then, a panel data model is founded to prove those propositions. In this model, the dependent variable is the level of local FDI in services, while the explanatory variables are the selected factors. Considering the applicability of our conclusion in China, the data used in the econometric analysis is the panel data of the services FDI in Chinese provinces. In this paper, the real estate industry and the financial services industry are respectively studied as the examples of the producer services and consumer services, because the financial services industry is the main industry in services which internationally transfer and the real estate industry has occupied the main share of services FDI in China.It is concluded that the quality discrepancy of human resource among different locations is the main factor which induces the discrepancy of the transfer of services. In addition, the discrepancy in the extent of industrial agglomeration among different locations is another reason for the discrepancy of the transfer of financial services, and the discrepancy in the extent of service product differentia is another main factor which induces the discrepancy of the transfer of the real estate services.