A Study On FDI Cluster In Yangtze River Delta

Recently, with more and more foreign investment flowing world-widely, developing countries become the most important carriers of foreign investment. Moreover, the distribution of foreign investment which makes great contribution to economomic growth in developing countries takes on a tendency of clustering. With the promotion of economic globalization and reform & openning-up, Yangtze River Delta has become the most importmant clustering area, foreign investment of where accounted for almost 40% of the country in 2004. Lots of industrial cluster areas come into being with the promotion of foreign investment.The article takes 15 cities of Yangtze River Delta as the research sample. At the guide of International economics, Statistics, Industrial Economics, Econometrics, learning from the mature theory in the related fields and the latest research results of emipirical analysis,using the related data from 1990^th to now, the paper expoundes the economic effects of FDI cluster of the Yangtze River Delta, mainly analyzes the location factors influencing FDI cluster.The economic effect of foreign investment on the host country is widespread, includes GDP, trade, employment, etc. Using the method of regression analysis, the paper analyzes contribution of foreign investment to the economy of Yangtze River Delta. The conclusion of empirical research shows that foreign investment drastically promotes GDP growth, the development of trade and the increasement of employment in the Yangtze River Delta.There are a series of factors influencing FDI cluster. The article classifies those factors into spatial structure factors and organizational struture factors which will be quantified by choosing related indicators. Afterwards, the paper uses the method of forward regression combined with reverse regression by SPSS statistical software, and discovers the most superior relationship betweem FDI and those factors. According to the analysis results of the model, the paper analyzes the promotion and constraining factors influencing FDI cluster inYangtze River Delta.Research shows that the transportation, information networks and government support have effectively promoted the development of cluster of foreign investment in the area , but the effect of industrial system, the innovation system on FDI is not very clear. Basing on the results of regression analysis,the paper puts forward a series of suggestions of how to attract more foreign capital flow into Yangtze River Delta. In order to introduce foreign capital continuously, modern logistics, new innovation system, reasonable industrial system of this area still need to be strengthened and improved.